The coincident index also rose slightly in April, and the index has been revised downward slightly in recent months due to the incorporation of newly available manufacturing sales data. April's increase was largely driven by positive contributions from number of employed persons as well as real retail, wholesale, and manufacturing sales. From October to April, the coincident index fell 0.3 percent and the weaknesses among coincident indicators became more widespread than strengths.
The leading index has been fluctuating around a flat trend since mid-2006, and the growth of the coincident index has gradually declined since November. At the same time, real GDP grew at a (revised) 2.4 percent average annual rate in the first quarter of 2007, up from a 1.0 percent average annual rate in the second half of 2006. The current behavior of the leading index so far still suggests that economic growth should continue, albeit at a moderate to slow rate, in the near term.
LEADING INDICATORS. Seven of the ten components that make up the leading index increased in April. The positive contributors to the index — in order from the largest positive contributor to the smallest — include the (inverted) business failures, interest rate spread, stock prices, the index of overtime worked, dwelling units started, real money supply, and the six month growth rate of labor productivity. The negative contributors — in order from the largest negative contributor to the smallest — include the new orders for machinery and construction component and real operating profits. The Tankan business conditions survey remained unchanged in April.
With the increase of 0.2 percent in April, the leading index now stands at 87.9 (1990=100). Based on revised data, this index decreased 0.2 percent in March and decreased 0.2 percent in February. During the six-month span through April, the index increased 0.0 percent, and six of the ten components advanced (diffusion index, six-month span equals 60.0 percent).
COINCIDENT INDICATORS. Two of the four components that make up the coincident index increased in April. The positive contributors to the index — in order from the largest positive contributor to the smallest — include number of employed persons and the retail, wholesale, and manufacturing sales component. Industrial production declined and wage and salary income remained unchanged in April.
With the increase of 0.2 percent in April, the coincident index now stands at 107.4 (1990=100). Based on revised data, this index decreased 0.5 percent in March and 0.4 percent in February. During the six-month span through April, the index decreased 0.3 percent, and one of the four components advanced (diffusion index, six-month span equals 25.0 percent).
