The coincident index rose again in December. This index of current economic activity continues to rise steadily on a somewhat moderate growth trend. The six month growth rate of the coincident index remains at about a 1.0 percent annual rate. The major contributors to the gain in the coincident index in December were retail sales volume and employment.
The growth of the leading index picked up in the first half of 2006, up to a 5.0 to 5.5 percent annual rate, but it has gradually slowed through the last quarter of the year. At the same time, real GDP growth has been fluctuating around a 3.0 percent annual rate in 2006, with a 3.4 percent annual rate in the fourth quarter. The recent behavior of the leading and coincident indexes so far suggests moderate economic growth is likely to continue in the near term.
LEADING INDICATORS. Four of the eight components that make up the leading index increased in December. The positive contributors — from the largest positive contributor to the smallest — were productivity for the whole economy*, consumer confidence, operating surplus of corporations and stock prices. The negative contributors — from the largest negative contributor to the smallest — were volume of expected output, the fixed interest price index, and new orders for engineering industries*. Order book volume remained unchanged in December.
With the 0.1 percent increase in December, the leading index now stands at 138.7 (1990=100). Based on revised data, this index increased 0.1 percent in November and increased 0.1 percent in October. During the six-month span through December, the leading index increased 1.1 percent, with five of the eight components advancing (diffusion index, six-month span equals 62.5 percent).
COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in December. The positive contributors — from the largest positive contributor to the smallest — were retail sales, employment * and real household disposable income*. Industrial production declined.
With the increase of 0.2 percent in December, the coincident index now stands at 117.4 (1990=100). Based on revised data, this index increased 0.1 percent in November and increased 0.1 percent in October. During the six-month period through December, the coincident index increased 0.5 percent, with three of the four components advancing (diffusion index, six-month span equals 87.5 percent).
