The coincident index increased again in August, continuing on a moderately rising trend that began in the middle of 2006. In addition, the strengths among the coincident indicators remain widespread. At the same time, real GDP grew at about a 3.3 percent average annual rate in the first half of 2007. The recent behavior of the coincident and leading indexes suggest that economic growth should continue, but possibly at a slow pace in the near term.
LEADING INDICATORS
Four of the seven components that make up the leading index increased in August. The positive contributors - from the largest positive contributor to the smallest - were productivity for the whole economy, order book volume, consumer confidence, and operating surplus of corporations. The negative contributors - from the largest negative contributor to the smallest - were stock prices, volume of expected output, and yield spread.
With the 0.2 percent decrease in August, the leading index now stands at 129.3 (1990=100). Based on revised data, this index declined 0.2 percent in July and increased 0.2 percent in June. During the six-month span through August, the leading index increased 1.2 percent, with four of the eight components advancing (diffusion index, six-month span equals 57.1 percent).
COINCIDENT INDICATORS
Three of the four components that make up the coincident index increased in August. The positive contributors - from the largest positive contributor to the smallest - were employment, retail sales, and real household disposable income. Industrial production remained unchanged in August.
With the increase of 0.2 percent in August, the coincident index now stands at 118.9 (1990=100). Based on revised data, this index increased 0.1 percent in July and increased 0.2 percent in June. During the six-month period through August, the coincident index increased 0.9 percent, with all of the four components advancing (diffusion index, six-month span equals 100.0 percent).
