Japan Leading Economic Indicators and Related Composite Indexes for
December 2007
NEW YORK, Feb. 5 /PRNewswire/ -- The Conference Board reports today
that the leading index for Japan decreased 0.4 percent and the coincident
index decreased 0.1 percent in December.
-- The leading index declined in December, the fifth decline in the
index in the past six months. Most of the components contributed
negatively to the index this month, offsetting a large positive
contribution from dwelling units started. The six-month growth rate
of the leading index continued to fall, declining to a -3.6 percent
rate from June to December (a -7.1 percent annual rate), down from
about -2.0 percent (about a -4.0 percent annual rate) in recent
months, and the weaknesses among the leading indicators have become
more widespread than the strengths.
-- The coincident index declined in December, following two consecutive
monthly increases. Industrial production made a large positive
contribution to the index this month, but this was more than offset
by the large decline in wage and salary income. The six-month growth
rate of the coincident index slowed to 0.3 percent from June to
December (a 0.6 percent annual rate), below the 0.5 to 1.2 percent
growth rate (a 1.0 to 2.4 percent annual rate) in recent months, but
the strengths among the components remained fairly widespread over
the past six months.
-- The leading index has been volatile since mid-2006 and it began to
weaken in December 2006. This weakness has become gradually more
widespread among the leading indicators. The last time the leading
index fell by more than a 7.0 percent annual rate over the previous
six months was in January 2002. Meanwhile, real GDP growth slowed to
an average annual rate of 1.0 percent through the third quarter in
2007, including a -1.8 percent annual rate in the second quarter and
1.5 percent in the third quarter. Taken together, the current
behavior of the composite indexes highlights increasing risks for
further economic weakness, and suggests that economic activity is
likely to be sluggish in the near term.
LEADING INDICATORS. Four of the ten components that make up the leading
index increased in December. The positive contributors to the index -- in
order from the largest positive contributor to the smallest -- include
dwelling units started, the (inverted) business failures*, interest rate
spread, 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*, stock prices, the index of overtime worked, the Tankan business
conditions survey, real money supply and real operating profits*.
With the decrease of 0.4 percent in December, the leading index now
stands at 84.8 (1990=100). Based on revised data, this index remained
unchanged in November and decreased 0.2 percent in October. During the
six-month span through December, the index decreased 3.6 percent, and three
of the ten components advanced (diffusion index, six-month span equals 30.0
percent).
COINCIDENT INDICATORS. One of the four components that make up the
coincident index decreased in December. The positive contributor to the
index was industrial production. Wage and salary income*, number of
employed persons, and the retail, wholesale, and manufacturing sales*
component declined in December.
With the decrease of 0.1 percent in December, the coincident index now
stands at 109.0 (1990=100). Based on revised data, this index increased 0.2
percent in November and 0.5 percent in October. During the six-month span
through December, the index increased 0.3 percent, and three of the four
components advanced (diffusion index, six-month span equals 75.0 percent).
DATA AVAILABILITY AND NOTES. The data series used to compute the two
composite indexes reported in this release are those available "as of" 5:00
P.M. ET February 1, 2008. Some series are estimated as noted below.
* The series in the leading index that are based on The Conference
Board estimates are real operating profits, new orders for machinery, and
the six month growth rate of labor productivity. The series in the
coincident index that are based on The Conference Board estimates are real
manufacturing sales and wage and salary income.
http://www.boerse-online.de/charttechnik/
