The Conference Board CEI for France, a measure of current economic activity, remained unchanged in September after four small increases. Between March and September 2011, the coincident economic index increased by 0.5 percent (about a 1.0 percent annual rate), slower than the increase of 1.0 percent (about a 1.9 percent annual rate) between September 2010 and March 2011. The strengths in the coincident indicators have also become less widespread and have been only balanced with the weaknesses in the last six months. Meanwhile, real GDP grew at a 1.6 percent annual rate during the third quarter of 2011, after contracting at a 0.2 percent annual rate during the second quarter.
The Conference Board LEI for France declined again in September, amid widespread weakness among its components. In addition, the LEI’s six-month growth rate became negative for the first time since May 2009. At the same time, The Conference Board CEI for France has been on a slowly rising trend since reaching its most recent trough in August 2009, but its six-month growth rate has also moderated since the beginning of this year. Taken together, the recent behavior of the composite indexes suggests that although current economic activity remains in positive territory, risks to economic growth are increasing in the near term.
LEADING INDICATORS
Two of the seven components of the leading economic index increased in September. The positive contributors to the index - in order from the larger positive contributor to the smaller - are the yield spread and building permits (residential). The negative contributors to the index - beginning with the largest negative contributor - are production expectations, the stock price index, the inverted new unemployment claims, industrial new orders, and the ratio of the deflator of manufacturing value added to unit labor cost in manufacturing.
With the decrease of 0.6 percent in September, the leading economic index now stands at 112.8 (2004=100). Based on revised data, this index declined 0.5 percent in August and declined 0.3 percent in July. During the six-month span through September, the index decreased 1.1 percent, and one of the seven components increased (diffusion index, six-month span equals 14.3 percent).
COINCIDENT INDICATORS
Three of the four components of the coincident economic index increased in September. The positive contributors to the index were wage and salaries, employment, and personal consumption. Industrial production declined in September.
After remaining unchanged in September, the coincident economic index now stands at 105.6 (2004=100). Based on revised data, this index increased 0.1 percent in August and increased 0.1 percent in July. During the six-month period through September, the index increased 0.5 percent, with two of the four series making a positive contribution (diffusion index, six-month span equals 50.0 percent).
