The Conference Board CEI for France, a measure of current economic activity, increased in July for a third consecutive month. Between January and July 2011, the coincident economic index increased 0.3 percent (about a 0.6 percent annual rate), below the growth of 1.0 percent (about a 1.9 percent annual rate) during the previous six-month period. However, the strengths among the coincident indicators have remained more widespread than the weaknesses in recent months. Meanwhile, real GDP was essentially flat in the second quarter of 2011, after growth of 3.6 percent (annual rate) in the first quarter.
The Conference Board LEI for France declined in July (second decrease in three months), amid fairly widespread weaknesses among its components. In addition, the LEI’s six-month growth rate has been relatively steady since late 2009, fluctuating within a range of 2.0 to 4.0 percent. Meanwhile, The Conference Board CEI has been on a rising trend since reaching its most recent trough in August 2009, though it is still 1.3 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
Three of the seven components of the leading economic index increased in July. The positive contributors to the index — in order from the largest positive contributor to the smallest— are the yield spread, building permits (residential), and the ratio of the deflator of manufacturing value added to unit labor cost in manufacturing. The negative contributors to the index - beginning with the largest negative contributor - are industrial new orders, the inverted new unemployment claims, production expectations, and the stock price index.
With the decrease of 0.2 percent in July, the leading economic index now stands at 115.0 (2004=100). Based on revised data, this index increased 0.6 percent in June and declined 0.3 percent in May. During the six-month span through July, the index increased 2.2 percent, and three of the seven components increased (diffusion index, six-month span equals 42.9 percent).
COINCIDENT INDICATORS
Three of the four components of the coincident economic index increased in July. The positive contributors to the index were industrial production, wage and salaries, and employment. Personal consumption declined in July.
With the increase of 0.1 percent in July, the coincident economic index now stands at 105.2 (2004=100). Based on revised data, this index increased 0.1 percent in June and increased 0.2 percent in May. During the six-month period through July, the index increased 0.3 percent, with three of the four series making a positive contribution (diffusion index, six-month span equals 75.0 percent).
