The Conference Board CEI for Japan, a measure of current economic activity, also increased in October. Industrial production gained sharply, and the retail, wholesale, and manufacturing sales* component also increased this month. With the gain in October, the six-month growth rate in the coincident economic index continued to pick up, to 4.3 percent (about an 8.7 percent annual rate), significantly up from the decline of 1.8 percent (about a -3.6 percent annual rate) between October 2010 and April 2011. Meanwhile, real GDP growth also picked up sharply in the third quarter this year, to 6.0 percent (annual rate), following a 1.3 percent contraction in the second quarter and a 2.7 percent contraction in the first quarter this year.
The Conference Board LEI for Japan has been fluctuating around a downward trend that started in March last year. However, in the last several months the LEI has rebounded, and its six-month growth rate has returned to positive territory. Meanwhile, the rate of growth in The Conference Board CEI for Japan has also picked up in the last six months as the impact of the natural disasters wanes. Taken together, the composite indexes and their components suggest that although near term risks to economic growth remain, economic activity should continue increasing in the coming months.
Nine of the ten components that make up The Conference Board LEI for Japan increased in October. The positive contributors to the index – in order from the largest positive contributor to the smallest – include the (inverted) business failures, the new orders for machinery and construction component, the Tankan business conditions survey, interest rate spread, dwelling units started, real money supply, real operating profits, the six month growth rate of labor productivity, and stock prices. The index of overtime worked declined in October.
With the increase of 1.1 percent in October, The Conference Board LEI for Japan now stands at 95.2 (2004=100). Based on revised data, this index decreased 0.4 percent in September and increased 0.1 percent in August. During the six-month span through October, the index increased 1.5 percent, and five of the ten components advanced (diffusion index, six-month span equals 50.0 percent).
Two of the four components that make up The Conference Board CEI for Japan increased in October. The positive contributors to the index – in order from the larger positive contributor to the smaller – include industrial production and the retail, wholesale, and manufacturing sales component. Number of employed persons and wage and salary income remained unchanged in October.
With the increase of 0.3 percent in October, The Conference Board CEI for Japan now stands at 100.3 (2004=100). Based on revised data, this index increased 2.6 percent in September and increased 0.2 percent in August. During the six-month span through October, the index increased 4.3 percent, and all four components advanced (diffusion index, six-month span equals 100.0 percent).