Global| Sep 12 2005OECD Leaders Positive
by:Tom Moeller
|in:Economy in Brief
Summary
The July Leading Index of the Major 7 OECD economies rose 0.4%. Coming on the heels of a 0.5% June increase, the rise lifted the six month growth rate in the index to 0.5%, the first positive reading in six months. During the last ten [...]
The July Leading Index of the Major 7 OECD economies rose 0.4%. Coming on the heels of a 0.5% June increase, the rise lifted the six month growth rate in the index to 0.5%, the first positive reading in six months.
During the last ten years there has been a 68% correlation between the change in the leading index and the q/q change in the GDP Volume Index for the Big Seven countries in the OECD.
A third consecutive monthly increase in the U.S. leaders raised six month growth to 1.6%, its best since last August. The Canadian leaders also managed a third increase in as many months but the six month growth rate remained negative at -1.0%.
Leaders in the European Union (15 countries) squeaked out a 0.2% increase, the second after several months of decline, and the six month growth rate turned positive (0.2%) for the first time since March.
German leaders jumped 0.7%, the most for any month in nearly two years. The gain raised six month growth to 1.2%, the first positive reading this year, and owed much to an improvement in orders inflow and a better business climate. The French leaders also rose a strong 0.6%, enough to turn the six month growth positive for the first time since March. Moving the other way, the Italian leading index fell for the ninth consecutive month due to sharp declines in consumer confidence, the future tendency of order books and production. Six month growth in the leaders dropped to -4.4%, its worst 2000.
The UK leaders rose a modest 0.2%, helped by improvement in the Financial Times Share Index, but six month growth remained negative at -0.7%. Japan leaders rose 0.6% on top of an upwardly revised like gain in June, turning six month growth positive (0.3%) for the first time since January.
The latest OECD Leading Indicator report is available here.
| OECD | July | June | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Composite Leading Index | 102.28 | 101.91 | 0.1% | 102.05 | 97.67 | 96.37 |
| 6 Month Growth Rate | 0.5% | -0.1% | 3.5% | 2.6% | 2.2% |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
