The coincident index, a measure of current economic activity, continued its upward trend in February, increasing for the fourth time in the past five months. All five components made positive contributions to the index with final household consumption and the retail sales survey making the largest positive contributions. Since August, the coincident index has increased by 0.6 percent (about a 1.3 percent annual rate), below the 2.3 percent annual rate for the period between February 2007 and August 2007. The strengths among the coincident indicators have remained consistently widespread in recent months.
The leading index has grown at a slow but steady pace since June 2007 after growing at a faster pace for most of the period between the third quarter of 2005 and the first quarter of 2007. During the same period, the coincident index has grown at a slower pace than it did during the previous two years. Additionally, GDP growth has declined from an average annual rate of 3.9 percent during the first two quarters of 2007 to 3.1 percent during the last two quarters (including a 3.2 percent rate during the fourth quarter). The behavior of the leading and coincident indexes continues to suggest that slow to moderate economic growth will continue in the near term.
LEADING INDICATORS
Three of the six components that make up the leading index increased in September. The positive contributors-in order from the largest positive contributor to the smallest-are the Spanish contribution to Euro M2, job placings, and the inverted long-term government bond yield. The negative contributors - in order from the largest negative contributor to the smallest-are order books survey, the Spanish equity price index and the capital equipment component of industrial production.
With the increase of 0.1 percent in February, the leading index now stands at 158.7 (1990=100). Based on revised data, this index remained unchanged in January and increased 0.3 percent in December. During the six-month span through February, the index increased 1.0 percent, and five of the six components advanced (diffusion index, six-month span equals 83.3 percent).
COINCIDENT INDICATORS
All five components that make up the coincident index increased in February. The positive contributors - in order from the largest positive contributor to the smallest - are final household consumption, retail sales survey, industrial production excluding construction, employment and real imports.
With the increase of 0.2 percent in February, the coincident index now stands at 159.2 (1990=100). Based on revised data, this index increased 0.2 percent in January and increased 0.1 percent in December. During the six-month span through February, the index increased 0.6 percent, and five of the five components advanced (diffusion index, six-month span equals 100.0 percent).
