The Conference Board CEI for the Euro Area, a measure of current economic activity, remained unchanged in August, according to preliminary estimates. Between February and August 2010, the coincident economic index increased 0.5 percent (about a 1.0 percent annual rate), slightly faster than the increase of 0.3 percent (about a 0.6 percent annual rate) between August 2009 and February 2010. In addition, the strengths among the coincident indicators have remained very widespread in recent months. At the same time, real GDP increased at a 3.9 percent annual rate in the second quarter of 2010, following an increase of 0.8 percent in the previous quarter.
The Conference Board LEI for the Euro Area continued to increase in August, and it has now exceeded slightly its most recent peak in June 2007. 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 has been unchanged for the past three months, though it has been mostly increasing since late 2009. The recent behavior of the composite indexes suggests that economic activity should continue to grow, though at a moderate pace in the near term.
LEADING INDICATORS
Six of the eight components in The Conference Board LEI for the Euro Area increased in August. 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, new orders of capital goods, the Markit business expectations index (services), and the EURO STOXX® Index. The negative contributors - in order from largest to smallest - are the Markit Purchasing Managers' Index (manufacturing), and residential building permits.
With the 0.4 percent increase in August, The Conference Board LEI for the Euro Area now stands at 112.5 (2004=100). Based on revised data, this index increased 0.8 percent in July and increased 0.5 percent in June. During the six-month span through August, the index increased 4.1 percent, with seven of the eight components increasing (diffusion index, six-month span equals 87.5 percent).
COINCIDENT INDICATORS
One of the four components that make up The Conference Board CEI for the Euro Area increased in August. The positive contributor was manufacturing turnover. Employment, industrial production, and retail trade remained unchanged in August.
After no change in August, The Conference Board CEI for the Euro Area now stands at 102.5 (2004=100). Based on revised data, this index remained unchanged in July and remained unchanged in June. During the six-month period through August, the index increased 0.5 percent, with three of the four components increasing (diffusion index, six-month span equals 87.5 percent).
