The Conference Board CEI for the Euro Area, a measure of current economic activity, remained unchanged in July, according to preliminary estimates. Between January and July 2010, the coincident economic index increased by 0.5 percent (about a 1.0 percent annual rate), slightly faster than the 0.3 percent increase (about a 0.6 percent annual rate) during the previous six months. In addition, the strengths among the coincident indicators have remained widespread in recent months. At the same time, real GDP grew at a 3.9 percent annual rate during the second quarter, after growing at a 0.8 percent annual rate during the first quarter.
The Conference Board LEI increased in July and is now above its most recent peak in June 2007. However, the 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 and July, though it has been mostly increasing since October 2009. The recent behavior of the composite indexes suggests that economic activity should continue to grow, though at a more moderate pace in the near term.
LEADING INDICATORS
Six of the eight components in The Conference Board LEI for the Euro Area increased in July. 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, the Markit Purchasing Managers' Index (manufacturing), the Markit Business Expectations Index (services), and EURO STOXX® Index. New orders of capital goods and building permits declined in July.
With the 1.0 percent increase in July, The Conference Board LEI for the Euro Area now stands at 112.5 (2004=100). Based on revised data, this index increased 0.6 percent in June and declined 0.4 percent in May. During the six-month span through July, the index increased 4.5 percent, with five of the eight components increasing (diffusion index, six-month span equals 62.5 percent).
COINCIDENT INDICATORS
One of the four components that make up The Conference Board CEI for the Euro Area increased in July. Retail trade was the only positive contributor this month. Manufacturing turnover declined in July, while employment and industrial production remained unchanged.
After remaining unchanged in July, The Conference Board CEI for the Euro Area now stands at 102.5 (2004=100). Based on revised data, this index remained unchanged in June and increased 0.3 percent in May. During the six-month period through July, the index increased 0.5 percent, with three of the four components increasing (diffusion index, six-month span equals 87.5 percent).
