The Conference Board CEI for Japan, a measure of current economic activity, also declined in November. The employment and income components continued to decrease this month. With the decline in November, the six-month change in the coincident economic index continued to fall – to -1.9 percent (a -3.8 percent annual rate) for the period through November 2010, down from the increase of 2.5 percent (about a 5.0 percent annual rate) for the previous six months. Meanwhile, real GDP growth was revised up from 3.9 percent to 4.5 percent (annual rate) in the third quarter of 2010, following an increase of 3.0 percent annual rate in the second quarter.
The Conference Board LEI for Japan continued to fall in November and the weaknesses among the leading indicators have been widespread. As a result, its six-month growth rate remains negative. At the same time, The Conference Board CEI for Japan has been decreasing with widespread weaknesses among its components. Taken together, the behavior of the composite indexes continues to suggest that economic activity may weaken further in the coming months.
LEADING INDICATORS
Four of the ten components that make up The Conference Board LEI for Japan increased in November. The positive contributors to the index – in order from the largest positive contributor to the smallest – include stock prices, the (inverted) business failures, the interest rate spread, and dwelling units started. The negative contributors – in order from the largest negative contributor to the smallest – include the six-month growth rate of labor productivity, the new orders for machinery and construction component, real operating profits, the Tankan business conditions survey, real money supply, and the index of overtime worked.
With the decrease of 0.6 percent in November, The Conference Board LEI for Japan now stands at 93.7 (2004=100). Based on revised data, this index decreased 1.4 percent in October and decreased 0.6 percent in September. During the six-month span through November, the index decreased 4.1 percent, and four of the ten components advanced (diffusion index, six-month span equals 40.0 percent).
COINCIDENT INDICATORS
Two of the four components that make up The Conference Board CEI for Japan decreased in November. The positive contributors to the index – in order from the larger positive contributor to the smaller – include industrial production and the retail, wholesale, and manufacturing sales component. Number of employed persons and wage and salary income declined in November.
With the decrease of 0.2 percent in November, The Conference Board CEI for Japan now stands at 97.2 (2004=100). Based on revised data, this index decreased 0.9 percent in October and decreased 0.2 percent in September. During the six-month span through November, the index decreased 1.9 percent, and only one of the four components advanced (diffusion index, six-month span equals 25.0 percent).
