The Conference Board CEI for the Euro Area, a measure of current economic activity, declined in September after increasing slightly in August, according to preliminary estimates. Between March and September 2010, the coincident economic index increased by 0.3 percent (about a 0.6 percent annual rate), below the 0.7 percent increase (about a 1.4 percent annual rate) for the previous six months. Additionally, the strengths among the coincident indicators have become somewhat less widespread in recent months, though they remain more widespread than the weaknesses. At the same time, real GDP increased at a 3.9 percent annual rate during the second quarter of 2010, following an increase of 1.4 percent annual rate during the first quarter.
The Conference Board LEI for the Euro Area continued to increase in September. However, its six-month growth rate has continued to fall, and is now at the slowest pace since the middle of 2009. Meanwhile, The Conference Board CEI for the Euro Area has been largely flat for the past four months, after mostly increasing since October 2009. The recent behavior of the composite indexes suggests that economic activity should continue to grow, though at a modest pace in the near term.
LEADING INDICATORS
Five of the eight components in The Conference Board LEI for the Euro Area increased in September. 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 EURO STOXX® Index, and the Markit business expectations index (services). The negative contributors - in order from largest to smallest - are the Markit Purchasing Managers' Index (manufacturing), new orders of capital goods, and residential building permits.
With the 0.3 percent increase in September, The Conference Board LEI for the Euro Area now stands at 113.1 (2004=100). Based on revised data, this index increased 0.7 percent in August and increased 0.9 percent in July. During the six-month span through September, the index increased 3.0 percent, with three of the eight components increasing (diffusion index, six-month span equals 37.5 percent).
COINCIDENT INDICATORS
One of the four components that make up The Conference Board CEI for the Euro Area increased in September. The positive contributor was retail trade*. Manufacturing turnover* declined in September while employment*and industrial production* remained unchanged.
With the 0.1 percent decline in September, The Conference Board CEI for the Euro Area now stands at 102.6 (2004=100). Based on revised data, this index increased 0.2 percent in August and remained unchanged in July. During the six-month period through September, the index increased 0.3 percent, with two of the four components increasing (diffusion index, six-month span equals 75.0 percent).
