The coincident index, a measure of current economic activity, increased in April, after declining slightly in March. The retail sales survey was the largest positive contributor and none of the components contributed negatively in April. During the past six months, the coincident index has increased by 0.6 percent (about a 1.1 percent annual rate), slightly below the 0.8 percent rate (about a 1.7 percent annual rate) which prevailed between April 2007 and October 2007. Additionally, the strengths among the coincident indicators have become slightly less widespread, but the number of components rising is still greater than that falling in recent months.
During the past year, the growth rate of the leading index has fallen and the leading index fell over the preceding six months for the first time since August 2004. Likewise, the growth rate of the coincident index has declined significantly after peaking in March 2007, following a fairly steady period of growth from mid -2003 to mid-2007. At the same time, real GDP growth has slowed from an average annual rate of 3.9 percent for the first two quarters of 2007 down to a 1.1 percent rate during the first quarter of 2008. Taken together, the recent behavior of the leading and coincident indexes suggests that economic growth is likely to remain slow in the near term.
LEADING INDICATORS
Four of the six components that make up the leading index increased in April. The positive contributors - in order from the largest positive contributor to the smallest - are the capital equipment component of industrial production, the Spanish equity price index, the Spanish contribution to Euro M2, and job placings. The negative contributors - in order from the largest negative contributor to the smallest - are order books survey, and the inverted longterm government bond yield.
0.2 percent in February. During the six-month span through April, the index decreased 0.4 percent, and two of the six components advanced (diffusion index, six-month span equals 33.3 percent).
COINCIDENT INDICATORS
Four of the five components that make up the coincident index increased in April. The positive contributors - in order from the largest positive contributor to the smallest - are retail sales survey, employment, final household consumption and real imports. Industrial production excluding construction remained unchanged in April.
With the increase of 0.3 percent in April, the coincident index now stands at 159.3 (1990=100). Based on revised data, this index decreased 0.1 percent in March and increased 0.2 percent in February. During the six-month span through April, the index increased 0.6 percent, and three of the five components advanced (diffusion index, six-month span equals 60.0 percent).
