Japan Leading Economic Indicators and related composite indexes for May 2008
NEW YORK, July 8 /PRNewswire/ -- The Conference Board reports today that
the leading index for Japan decreased 1.2 percent and the coincident index
decreased 0.3 percent in May.
-- The leading index declined for the sixth consecutive month in May.
Positive contributions from stock prices, dwelling units started, and the
yield spread were more than offset by large negative contributions from new
orders for machinery and construction, business failures (inverted), and the
Tankan business conditions survey. The six-month change in the leading index
stands at -3.5 percent (about a -6.9 percent annual rate) during the six-month
span through May, down from -2.3 percent (about a -4.6 percent annual rate)
between May 2007 to November 2007. In addition, the weaknesses among the
leading indicators have remained widespread in recent months.
-- The coincident index, a measure of current economic activity, declined
in May, after a moderate increase in April. Except for industrial production,
all the coincident indicators contributed negatively to the index this month.
With this decline, the coincident index has now fallen by 1.1 percent (a -2.2
percent annual rate) in the six-month period through May, down from a 0.6
percent increase (a 1.3 percent annual rate) from May 2007 to November 2007.
Moreover, the weaknesses among the coincident indicators have become more
widespread than strengths in recent months.
-- The leading index remains on a downtrend that began in the middle of
2007, and it has fallen 7.6 percent from its recent highest level in December
2006. Meanwhile, the coincident index began to decrease in December 2007, with
its rate of decline having picked up in recent months. Real GDP expanded at a
3.1 percent annual rate in the first quarter of 2008, moderately faster than
the 1.9 percent average annual rate of growth in the second half of 2007 and
the 1.0 percent average annual rate in the first half of 2007. The current
behavior of the composite indexes suggests that economic growth will likely be
slow in the near term.
LEADING INDICATORS. Three of the ten components that make up the leading
index increased in May. The positive contributors to the index -- in order
from the largest positive contributor to the smallest -- include stock prices,
dwelling units started, and the interest rate spread. The negative
contributors -- in order from the largest negative contributor to the smallest
-- include the new orders for machinery and construction component*, the
(inverted) business failures*, the Tankan business conditions survey, the
index of overtime worked, real operating profits*, the six-month growth rate
of labor productivity, and real money supply.
With the decrease of 1.2 percent in May, the leading index now stands at
81.9 (1990=100). Based on revised data, this index decreased 0.7 percent in
April and decreased 0.2 percent in March. During the six-month span through
May, the index decreased 3.5 percent, and three of the ten components advanced
(diffusion index, six-month span equals 35.0 percent).
COINCIDENT INDICATORS. One of the four components that make up the
coincident index increased in May. 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 May.
With the decrease of 0.3 percent in May, the coincident index now stands
at 108.1 (1990=100). Based on revised data, this index increased 0.4 percent
in April and decreased 0.8 percent in March. During the six-month span through
May, the index decreased -1.1 percent, and one of the four components advanced
(diffusion index, six-month span equals 25.0 percent).
Summary Table of Composite Indexes
2008 6-month
Mar Apr May Nov to May
Leading index 83.5 p 82.9 p 81.9 p
Percent Change -0.2 p -0.7 p -1.2 p -3.5 p
Diffusion 20.0 35.0 30.0 35.0
Coincident Index 108.0 108.4 p 108.1 p
Percent Change -0.8 0.4 p -0.3 p -1.1 p
Diffusion 25.0 75.0 25.0 25.0
n.a. Not available p Preliminary r Revised
Indexes equal 100 in 1990
Source: The Conference Board All Rights Reserved
The next release of the Japan Composite Indexes is scheduled for
Tuesday, August 5, 2008 at 9:00 P.M. (ET)
In Japan --- August 6, 2008 at 10:00 A.M. (JST)
SOURCE The Conference Board
Media: Frank Tortorici, +1-212-339-0231, or Carol Courter, +1-212-339-0232,
both for The Conference Board; Indicator Program: +1-212-339-0330,
indicators@conference-board.org
