The Conference Board CEI for the Euro Area, a measure of current economic activity, remained unchanged in June, according to preliminary estimates. Between December 2009 and June 2010, the coincident economic index increased 0.6 percent (about a 1.2 percent annual rate), higher than the 0.1 percent increase (about a 0.2 percent annual rate) during the second half of 2009. Additionally, the strengths among the coincident indicators have remained more widespread than the weaknesses in recent months. At the same time, real GDP grew at a 0.8 percent annual rate in the first quarter of 2010, following an increase of 0.5 percent annual rate in the fourth quarter of 2009.
After its first monthly decline in more than a year in May, The Conference Board LEI for the Euro Area increased in June. However, its six-month growth rate has slowed from its rapid pace in the second half of 2009. Meanwhile, The Conference Board CEI for the Euro Area was unchanged in June, though it has been mostly increasing since October 2009. The recent behavior of the composite indexes suggests that the moderate improvement in economic activity should continue in the near term.
LEADING INDICATORS
Four of the eight components in The Conference Board LEI for the Euro Area increased in June. The positive contributors - in order from the largest positive contributor to the smallest - are the interest rate spread, real money supply, the Economic Sentiment Index, and the EURO STOXX® Index. The negative contributors - in order from largest to smallest - are the Markit business expectations index (services), new orders of capital goods,and the Markit Purchasing Managers' Index (manufacturing). Residential building permits remained unchanged in June.
With the 0.5 percent increase in June, The Conference Board LEI for the Euro Area now stands at 111.2 (2004=100). Based on revised data, this index declined 0.3 percent in May and increased 0.8 percent in April. During the six-month span through June, the index increased 4.3 percent, with six of the eight components increasing (diffusion index, six-month span equals 75.0 percent).
COINCIDENT INDICATORS
None of the four components that make up The Conference Board CEI for the Euro Area increased in June. Manufacturing turnover declined, while employment, industrial production, and retail trade remained unchanged in June.
After remaining unchanged in June, The Conference Board CEI for the Euro Area now stands at 102.4 (2004=100). Based on revised data, this index increased 0.2 percent in May and decreased 0.1 percent in April. During the six-month period through June, the index increased 0.6 percent, with two of the four components increasing (diffusion index, six-month span equals 62.5 percent).
