The coincident index increased slightly in April, and it was revised down to a small decrease in March as actual data for employment and industrial production became available. The six-month growth rate in the coincident index has continued to slow, to 0.7 percent (a 1.3 percent annual rate) in the six-month period through April, down from 1.0 percent (a 2.0 percent annual rate) in the second half of 2007. However, the strengths among the coincident indicators have stayed fairly widespread.
The leading index continues to be on a downward trend that began in the middle of last year, and the rate of decline in the index picked up in recent months. At the same time, the coincident index, a measure of current economic activity, has generally been flat since January, after growing at a steady pace throughout 2007. Meanwhile, real GDP growth slowed to a 1.8 percent annual rate in the first quarter, down from an average annual rate of 2.5 percent in the second half of 2007. The current behavior of the composite indexes suggests that economic growth should remain slow in the near term.
LEADING INDICATORS. Two of the seven components that make up the leading index increased in April. The positive contributors — from the larger positive contributor to the smaller — were stock prices and productivity for the whole economy. The negative contributors — from the largest negative contributor to the smallest — were order book volume, consumer confidence, the volume of expected output, yield spread, and operating surplus of corporations.
With the 0.5 percent decrease in April, the leading index now stands at 126.5 (1990=100). Based on revised data, this index declined 0.1 percent in March and declined 0.4 percent in February. During the six-month span through April, the leading index decreased 2.2 percent, with two of the seven components advancing (diffusion index, six-month span equals 28.6 percent).
COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in April. The positive contributors — from the largest positive contributor to the smallest — were employment, real household disposable income, and industrial production. Retail sales declined in April.
With the increase of 0.1 percent in April, the coincident index now stands at 120.2 (1990=100). Based on revised data, this index decreased 0.2 percent in March and increased 0.2 percent in February. During the six-month period through April, the coincident index increased 0.7 percent, with three of the four components advancing (diffusion index, six-month span equals 75.0 percent).
