The Coincident Economic Index fell for the seventh consecutive month in November as industrial production excluding construction and the retail sales survey made the largest negative contributions. From May to November, the CEI has declined by 3.1 percent (about a -6.0 percent annual rate), well below the 0.5 percent decline (about a -1.1 percent annual rate) for the previous six months. In addition, the weaknesses among the coincident indicators remained very widespread, with none of the components increasing. At the same time, real GDP declined at a 1.0 percent annual rate during the third quarter, down from the 1.0 percent average annual rate of growth for the first half of 2008.
The leading economic index has been falling since the first quarter of 2008, decreasing by 3.6 percent since February, its largest decrease since 1992. The coincident economic index has also been falling since its peak in February 2008, experiencing its most severe contraction since the 1992-93 downturn. Taken together, the recent behavior of the composite indexes suggests that economic activity could contract further in the near term.
LEADING INDICATORS
Two of the six components that make up the leading economic index increased in November. The positive contributors - in order from the largest positive contributor to the smallest - are the Spanish contribution to Euro M2, and the inverted long-term government bond yield. The negative contributors - in order from the largest negative contributor to the smallest - are order books survey, job placings, and the Spanish equity price index. The capital equipment component of industrial production remained unchanged.
With the decrease of 0.5 percent in November, the leading economic index now stands at 108.4 (2004=100). Based on revised data, this index declined 1.2 percent in October and declined 0.3 percent in September. During the six-month span through November, the index decreased 2.1 percent, and two of the six components advanced (diffusion index, six-month span equals 41.7 percent).
COINCIDENT INDICATORS
One of the five components that make up the coincident economic index increased in November. The only positive contributor this month is real imports. Industrial production excluding construction, retail sales survey, employment, and final household consumption declined in November.
With the decrease of 0.6 percent in November, the coincident economic index now stands at 107.7 (2004=100). Based on revised data, this index decreased 0.6 percent in October and decreased 0.5 percent in September. During the six-month span through November, the index decreased 3.1 percent, and none of the five components advanced (diffusion index, six-month span equals 0.0 percent).
