The Conference Board CEI for France, a measure of current economic activity, increased again in August. Between February and August 2011, the coincident economic index increased 0.5 percent (about a 1.0 percent annual rate), slower than the increase of 1.3 percent (about a 2.5 percent annual rate) between August 2010 and February 2011. However, the strengths among the coincident indicators have been more widespread than the weaknesses in recent months. Meanwhile, real GDP was essentially unchanged in the second quarter of 2011, after increasing at a 3.7 percent annual rate in the first quarter.
The Conference Board LEI for France declined again in August, amid widespread weaknesses among its components. In addition, the LEI’s six-month growth rate has now slowed to the lowest rate since June 2009. Meanwhile, The Conference Board CEI has been on a rising trend since reaching its most recent trough in August 2009, though it is still 0.8 percent below its most recent peak in February 2008. 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 August. The positive contributors to the index - in order from the largest positive contributor to the smallest - are the yield spread and unemployment claims (inverted). The negative contributors to the index - beginning with the largest negative contributor - are the stock price index, production expectations, industrial new orders, and the ratio of the deflator of manufacturing value added to unit labor cost in manufacturing. Building permits (residential) remained unchanged in August.
With the decrease of 0.5 percent in August, the leading economic index now stands at 113.5 (2004=100). Based on revised data, this index declined 0.3 percent in July and increased 0.5 percent in June. During the six-month span through August, the index increased 0.3 percent, and two of the seven components increased (diffusion index, six-month span equals 28.6 percent).
COINCIDENT INDICATORS
Three of the four components of the coincident economic index increased in August. The positive contributors to the index were wage and salaries, industrial production, and employment. Personal consumption declined in August.
With the increase of 0.1 percent in August, the coincident economic index now stands at 105.7 (2004=100). Based on revised data, this index increased 0.2 percent in July and increased 0.1 percent in June. During the six-month period through August, the index increased 0.5 percent, with three of the four series making a positive contribution (diffusion index, six-month span equals 75.0 percent).
