The Conference Board Leading Economic IndexTM (LEI) for the Euro Area increased 1.2 percent and The Conference Board Coincident Economic IndexTM (CEI) decreased 0.1 percent in September.

The Conference Board LEI for the Euro Area increased sharply for the sixth consecutive month in September, with the yield spread and the Economic Sentiment Index again making the largest positive contributions. Between March and September 2009, the leading economic index increased by 10.3 percent (about a 21.7 percent annual rate), a sharp reversal from the 7.2 percent decline (about a -13.9 percent annual rate) between September 2008 and March 2009. In addition, the strengths among the leading indicators have become very widespread, with all components increasing during the past six months.

The Conference Board CEI for the Euro Area declined slightly again in September according to preliminary estimates. Between March and September 2009, the coincident economic index decreased by 0.5 percent (about a -1.0 percent annual rate), much slower than the 2.9 percent decline (about a -5.8 percent annual rate) during the previous six months. Additionally, the strengths and weaknesses among the coincident indicators have become balanced in recent months. At the same time, real GDP fell at a 0.7 percent annual rate (revised) in the second quarter of 2009, following a contraction of 9.6 percent annual rate in the first quarter.

After declining rapidly from the middle of 2007 through the end of last year, The Conference Board LEI for the Euro Area has rebounded strongly during the past two quarters. The six-month growth rate in the index has continued to pick up, reaching the highest rate since 1987 amid widespread strength among its components. Meanwhile, the decline in The Conference Board CEI for the Euro Area has gradually slowed and many of its components are gaining strength. Taken together, the recent behavior of the composite economic indexes suggests that the downturn in economic activity is bottoming out and that economic conditions will improve in the near term.

LEADING INDICATORS

Seven of the eight components in The Conference Board LEI for the Euro Area increased in September. The positive contributors - in order from the largest positive contributor to the smallest - are the interest rate spread, the Economic Sentiment Index, real money supply, the Markit Purchasing Managers' Index (manufacturing), the Dow Jones EURO STOXX® Index, the Markit business expectations index (services) and new orders of capital goods. Residential building permits was the only negative contributor in September.

With the 1.2 percent increase in September, The Conference Board LEI for the Euro Area now stands at 100.6 (2004=100). Based on revised data, this index increased 1.8 percent in August and increased 1.7 percent in July. During the six-month span through September, the index increased 10.3 percent, with all eight components increasing (diffusion index, six-month span equals 100.0 percent).

COINCIDENT INDICATORS

Retail trade was the only positive contributor to The Conference Board CEI for the Euro Area in September. Employment declined in September while industrial production and manufacturing turnover remained unchanged.

With the 0.1 percent decline in September, The Conference Board CEI for the Euro Area now stands at 101.7 (2004=100). Based on revised data, this index decreased 0.1 percent in August and remained unchanged in July. During the six-month period through September, the index decreased 0.5 percent, with two of the four components increasing (diffusion index, six-month span equals 50.0 percent).