The coincident index declined in June and was revised downward for February to May as a result of downward revisions to industrial production. Industrial production excluding construction, and the retail sales survey each made substantial negative contributions to the index in June. During the first half of 2008, the coincident index declined by 0.1 percent, its first six-month decline since 1993. However, the strengths among the coincident indicators have remained slightly more widespread than the weaknesses in recent months.
Over the past four months, the leading index has fallen precipitously following three years of steady growth. The deterioration in the index over the past six months is the sharpest since the 1992-93 decline. Meanwhile, the coincident index has remained nearly flat since October 2007, after a long period of steady increase. At the same time, real GDP growth declined sharply from a 3.0 percent average annual rate for the last two quarters of 2007 to a 1.1 percent rate for the first quarter of 2008. The recent behavior of the composite indexes continues to suggest that economic growth will remain slow in the near term.
LEADING INDICATORS
Three of the six components that make up the leading index increased in June. The positive contrib utors - in order from the largest positive contributor to the smallest - are the capital equipment component of industrial production, job placings, and the Spanish contribution to Euro M2. The negative contributors - in order from the largest negative contrib utor to the smallest - are the Spanish equity price index, the order books survey, and the inverted long-term government bond yield.
With the decrease of 0.4 percent in June, the leading index now stands at 155.4 (1990=100). Based on revised data, this index declined 0.7 percent in May and remained unchanged in April. During the six-month span through June, the index decreased 1.9 percent, and one of the six components advanced (diffusion index, six- month span equals 16.7 percent).
COINCIDENT INDICATORS
Three of the five components that make up the coincident index increased in June. The positive contributors - in order from the largest positive contributor to the smallest - are final household consumption, employment, and real imports. Industrial production excluding construction and the retail sales survey declined in June.
With the decrease of 0.1 percent in June, the coincident index now stands at 158.4 (1990=100). Based on revised data, this index decreased 0.1 percent in May and increased 0.1 percent in April. During the six-month span through June, the index decreased -0.1 percent, and three of the five components advanced (diffusion index, six-month span equals 60.0 percent).
