The Conference Board CEI for France, a measure of current economic activity, increased as well in September after no change in the previous month. Between March and September 2010, the coincident economic index increased 0.7 percent (a 1.4 percent annual rate), modestly faster than the increase of 0.4 percent (a 0.8 percent annual rate) between September 2009 and March 2010. In addition, the strengths among the coincident indicators have been very widespread in recent months. At the same time, real GDP increased at a 1.4 percent annual rate in the third quarter of 2010, following a revised increase of 2.7 percent annual rate in the previous quarter.
The Conference Board LEI for France has been on an upward trend since April 2009, and the index is now 1.4 percent above its most recent peak in October 2007. However, its six-month growth has moderated slightly from the very fast pace reached late last year. Meanwhile, The Conference Board CEI for France has been increasing moderately in 2010, with its six-month growth rate picking up somewhat in recent months. Taken together, the behavior of the composite indexes suggests that economic activity should continue to grow moderately in the near term.
LEADING INDICATORS
Six of the seven components of the leading economic index increased in September. The positive contributors to the index - in order from the largest positive contributor to the smallest - are the yield spread, industrial new orders, building permits (residential), the stock price index, production expectations, and the inverted new unemployment claims. The ratio of the deflator of manufacturing value added to unit labor cost in manufacturing* made a negative contribution to the index in September.
With the increase of 0.8 percent in September, the leading economic index now stands at 112.0 (2004=100). Based on revised data, this index increased 0.9 percent in August and increased 0.9 percent in July. During the six-month span through September, the index increased 3.4 percent, and four of the seven components increased (diffusion index, six-month span equals 57.1 percent).
COINCIDENT INDICATORS
All four components of the coincident economic index, personal consumption, employment, wages and salaries, and industrial production, increased in September.
With the increase of 0.2 percent in September, the coincident economic index now stands at 104.5 (2004=100). Based on revised data, this index remained unchanged in August and increased 0.2 percent in July. During the six-month period through September, the index increased 0.7 percent, with all four series making a positive contribution (diffusion index, six-month span equals 100.0 percent).
Prior to March 2009, the residential building permits component of The Conference Board LEI for France is calculated as permits granted minus permits cancelled. From March 2009 going forward, the permits granted series replaces residential building permits because of delays in the publication of permits cancelled data by the source agency. The same standardization factor is applied to both series because their volatilities are similar. If the missing series becomes available, the original definition of the housing permits series may be restored at the next benchmark revision.
