The Conference Board Leading Economic Index® (LEI) for France declined 0.3 percent and The Conference Board Coincident Economic Index® (CEI) increased 0.1 percent in May.

The Conference Board LEI for France declined in May, following five consecutive monthly increases. Industrial new orders, new unemployment claims (inverted), and production expectations made large negative contributions to the index this month, more than offsetting the strong positive contribution from the yield spread. Between November 2010 and May 2011, the leading economic index increased 3.2 percent (a 6.4 percent annual rate), faster than the increase of 1.9 percent (a 3.9 percent annual rate) during the previous six months. In addition, the strengths among the leading indicators have been widespread recently.

The Conference Board CEI for France, a measure of current economic activity, increased in May. A positive contribution from industrial production compensated for the decline in personal consumption. In the six-month period ending May 2011, the coincident economic index increased 0.6 percent (a 1.2 percent annual rate), slightly below the 0.7 percent rate of growth (a 1.4 percent annual rate) during the previous six months. Additionally, the strengths among the coincident indicators have been widespread recently. Meanwhile, real GDP increased at a 3.8 percent annual rate in the first quarter of 2011, following an increase of 1.3 percent annual rate in the fourth quarter of 2010.

The Conference Board LEI for France declined in May, its first decline this year. However, the index is 3.9 percent above its most recent peak in August 2007. In addition, its six-month growth rate has been relatively steady. Meanwhile, The Conference Board CEI has been on a rising trend since reaching its most recent trough in August 2009, but it remained flat since February. Taken together, the behavior of the composite indexes suggests that economic activity should expand, albeit moderately, in the near term.

LEADING INDICATORS.

Two of the seven components of the leading economic index increased in May. The positive contributors to the index — in order from the largest positive contributor to the smallest — were the yield spread and building permits (residential). The negative contributors to the index — beginning with the largest negative contributor — are industrial new orders, the inverted new unemployment claims, production expectations, and the ratio of the deflator of manufacturing value added to unit labor cost in manufacturing. Stock prices were unchanged.

With the decrease of 0.3 percent in May, the leading economic index now stands at 114.2 (2004=100). Based on revised data, this index increased 0.3 percent in April and increased 1.0 percent in March. During the six-month span through May, the index increased 3.2 percent, and six of the seven components increased (diffusion index, six-month span equals 85.7 percent).

COINCIDENT INDICATORS.

Three of the four components of the coincident economic index increased in May. The positive contributors to the index were industrial production, employment, and wage and salaries. Personal consumption declined in May.

With the increase of 0.1 percent in May, the coincident economic index now stands at 105.1 (2004=100). Based on revised data, this index decreased 0.1 percent in April and remained unchanged in March. During the six-month period through May, the index increased 0.6 percent, with three of the four series making a positive contribution (diffusion index, six-month span equals 75.0 percent).