OECD composite leading indicators (CLIs) for December 2009 provide stronger signals of an expansionary economic outlook than last month.
CLIs for the G7 economies as well as China, India, Russia and Brazil, are now all close to, or above, their long-term trends. In all these countries, industrial production – the underlying reference series for the CLIs – has now reached its trough.
The CLI for the OECD area increased by 0.9 point in December 2009 and was 10.1 points higher than in December 2008. The CLI for the United States increased by 0.9 point in December, 9.0 points higher than a year ago. The Euro area’s CLI increased by 0.9 point in December, 12.2 points higher than a year ago. The CLI for Japan increased by 1.2 point in December, 8.1 points higher than a year ago. Full report here.
Technorati Tags: CLI, economic-data, leading indicators, OECD
Economic recovery continued to strengthen in November, latest OECD statistics show.
OECD composite leading indicators for November 2009 provide stronger signals of recovery than in last month’s assessment as industrial production improved.
The CLIs for all major seven countries have moved above their long-term trend, implying an expansionary outlook relative to trend.
The outlook for major non member economies also continues to point to a recovery.
The CLI for the OECD area increased by 1.0 point in November 2009 and was 8.2 points higher than in November 2008. The CLI for the United States increased by 1.0 point in November, 6.8 points higher than a year ago. The Euro area’s CLI increased by 1.1 point in November, 10.9 points higher than a year ago.
The CLI for Japan increased by 1.2 point in November, 5.4 points higher than a year ago. The CLI for the United Kingdom increased by 1.2 point in November 2009 and was 10.7 points higher than a year ago. The CLI for Canada increased by 1.0 point in November, 9.4 points higher than a year ago.
The CLI for China increased 0.2 point in November 2009, 7.6 points higher than a year ago. The CLI for India is unchanged in November and 4.3 points higher than a year ago. The CLI for Russia increased by 1.0 point in November, 3.4 points higher.
Technorati Tags: CLI, economic indicators, industrial production, OECD
Looks like the recovery is for real: another month of solid signs of improvement in OECD countries and major non-members.
OECD composite leading indicators (CLIs) for October 2009 continue to point to a recovery in OECD economies; with the CLIs for Canada, France, Italy, Germany and the United Kingdom pointing more strongly to recovery than in last month‟s assessment. Financial components (the spread of interest rates, EONIA, EURIBOR, M1) and business confidence are the main drivers to the CLI‟s performance in these countries.
All major non member economies are in a recovery phase.
The change in the outlook for China compared to last month‟s release is mainly due to a downward revision in the “Imports from Asia” component, the OECD said. To avoid confusion, it is important to note that the reference to “more strongly‟ is in the context of the likelihood of recovery rather than the strength of the recovery per se.
The CLI for the OECD area increased by 1.0 point in October 2009 and was 5.7 points higher than in October 2008. The CLI for the United States increased by 1.0 point in October, 3.9 points higher than a year ago. The Euro area’s CLI increased by 1.3 point in October, 8.8 points higher than a year ago. The CLI for Japan increased by 1.2 point in October, 2.2 points higher than a year ago. Other country data is here.
Technorati Tags: CLI, economic indicators, OECD
The improvement in the OECD’s leading economic indicators is looking like a solid trend after three straight positive months.
OECD composite leading indicators (CLIs) for July 2009 show stronger signs of recovery in most of the OECD economies. Clear signals of recovery are now visible in all major seven economies, in particular in France and Italy, as well as in China, India and Russia. The signs from Brazil, where a trough is emerging, are also more encouraging than in last month’s assessment.
The CLI for the OECD area increased by 1.5 point in July 2009 and was 1.9 point lower than in July 2008.
The CLI for the United States increased by 1.6 point in July, 4.3 points lower than a year ago. The Euro area’s CLI increased by 1.9 point in July, 1.4 point higher than a year ago. The CLI for Japan increased by 1.4 point in July, 6.6 points lower than a year ago. Full details here.
Technorati Tags: CLI, economic-data, economic-forecast, leading indicators, OECD
Count me among those not taking much comfort from today’s slightly-less-bad-than-expected US job losses. Looks like a long, hard slog back to economic prosperity.
Felix Salmon at Reuters is right to be concerned about the decline of some 7 million employed people since December 2007, and the 630,000 increase in “marginally attached” people during the last year.
…the absolute levels alone should be more than enough to depress anybody looking for any sign that the US economy is looking remotely healthy.
The OECD provides a disturbing chart in its latest economic assessment, showing that since the start of the recession the unemployment rate in the US has increased more dramatically than in almost all OECD countries and much more sharply than in Japan and other major comparable European economies other than Spain.
Tyler Durden at Zero Hedge points out that the “real” unemployment rate is 16.8% , including “total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.”
In other words, in reality the U.S. labor market is likely about as bad as Spain in terms of undoctored jobless data.
And then there’s this chart of the day comparing job losses during the current economic recession (solid red line) to that of the last recession (dashed gold line) and the average recession from 1950-2006 (dashed blue line).
…the current job market has suffered losses that are more than six times as much as average (20 months after the beginning of a recession). In fact, if this were an average recession/job loss cycle, the number of jobs would have begun to increase five months ago.
Source: Chart of the Day
Ed Harrison at CreditWritedowns is a bit more optimistic but also offers several negative indicators including this:
The 12-month loss in seasonally-adjusted non-farm payrolls (NFP) is still increasing and is at a business cycle high of 5.8 million.
Bringing this back to the financial markets, Standard & Poor’s finds an increase in the correlation between unemployment and credit card losses: historically, a 100% increase in the unemployment rate suggests about an 82% increase in credit card losses. During economic downturns like the one we’re currently in, however, this relationship becomes almost one-to-one (96%).
In other words, a 100% increase in the unemployment rate means a 96% increase in credit card losses.
The rolling 12-month percent changes in the unemployment and credit card loss rate levels, which have been far below 60% since 1992, are positively correlated. During the past few months, however, these 12-month percent changes have been around 70%, which suggests a steeper rise in credit card losses as a result of the rising unemployment rate.
One also has to wonder about the impact of underemployment, especially in an economy with a growing number of non traditional jobs, and also how uncertainty over the outcome (or indeed the outcome itself) of health care reform may retard rehiring. Don’t break out the champagne just yet.
(Bonus Weekend listening: for a historical perspective on employment, check out this podcast from The Back Story. If you can handle history professors channeling Click and Clack, this so for you.)
Angus Robertson
Technorati Tags: credit card debt, economic-data, employment, unemployment
The OECD offers a relatively upbeat outlook in its latest interim economic assessment, but warns pace of recovery will be slow.
Given the positive economic news and based on incoming high-frequency indicators, OECD short-term forecasting models point to an earlier recovery than envisaged a few months ago. As a consequence, the unprecedented rate of deterioration in labour market conditions witnessed over the past year should ease. Nonetheless, numerous headwinds imply that the pace of the recovery is likely to be modest for some time to come.
Substantial slack combined with the prospect for a weak recovery, implies that strong policy stimulus will continue to be needed in the near term. Regarding monetary policy, taking the first steps towards normalisation of policy interest rates from their current exceptionally low levels should in most cases and on current prospects wait until well into 2010 and in some cases even beyond.
It is also important that central banks communicate their intentions explicitly, if conditionally, so as to affect interest rates at longer maturities more effectively. On fiscal policy, it is important that announced stimulus measures be implemented promptly.
However, the possibility of a recovery taking hold a little sooner than envisaged only a few months ago diminishes the likelihood that further fiscal stimulus will be needed in those countries having scope for such action.
Looking further ahead, OECD countries need to prepare for the removal of the exceptional degree of support afforded by current monetary and fiscal policy stances. In this regard, preparing credible exit strategies and fiscal consolidation plans now, even if actual implementation will only commence later, is desirable.
The OECD provides some useful charts on financial conditions:
And also on improving bank lending trends:
And on the wide range of increases in unemployment: joblessness has risen by over 4 percentage points in the US since the beginning of 2008, compared with an in increase of almost 9 points in Spain and less than 1% in several other European countries and South Korea.
Technorati Tags: bank lending, economic-forecast, recovery, unemployment
Commercial Mortgage Security Delinquencies Continue to Rise (Fitch Ratings) http://bit.ly/ZLBIB
Online advertising spending worldwide fell 5% to $13.9 billion in Q2 (vs same quarter last year), according to IDC.http://bit.ly/85sg4
How Social Networking Will Take Over The Living Room TV: Excerpted from Five Things We Want From Social TV http://bit.ly/YWIpM
US Venture Capital valuations decline in Q2, but not as bad as Q1 (Fenwick & West survey) http://bit.ly/eTY6Z
U.S. online retail spending totaled $30.2 billion in Q2, down 1 percent versus year ago (comScore) http://bit.ly/qh8EA
Compensation & Crises: The Asymmetric Model: Guest Post by James A. Kaplan, Chairman and CEO, Audit Integrity. http://bit.ly/8xouE
UK house prices to fall a further 3% this yr before recovering a bit in 2010 (Centre for Economics and Business Research) http://bit.ly/C31U2
Venture Capitalists We Like (The Funded.com version) via DJ VentureWire http://bit.ly/2MNpZ
The History of US Government Corporate Bailouts 1970-2008 (Financial Infographics) H/T FT Alphaville/The Big Picture http://bit.ly/1DFeNn
RT @RetailTraffic Fed Concerned About Commercial Real Estate (Weekend Roundup) http://bit.ly/4u0t6
SWFs Diversifying Away from Financial Sector: Guest Post from Monitor Group. http://bit.ly/AL2pm
Robert Lucas of University of Chicago says financial crisis does not represent a failure of economics (The Economist) http://bit.ly/jcKus
Composite Leading Indicators continue to show signs of improvement in most OECD economies http://bit.ly/RYQLd
The number of people being declared insolvent has hit a new record high in England and Wales. (BBC) http://bit.ly/Zx6XG
OECD composite leading indicators (CLIs) for May 2009 point to tangible signs of improvement in the outlook of most OECD economies, with the notable exception of Japan and Brazil.
“Potential recovery signals are emerging in Italy and France, with indications of troughs emerging in Canada, the United Kingdom, the United States, China and India. The trough signals are more tentative in Russia,” according to the OECD.
The CLI for the OECD area increased by 0.8 point in May 2009 but was 7.3 points lower than in May 2008.
The CLI for the United States increased by 1.0 point in May but was 9.4 points lower than a year ago. The Euro area’s CLI was up by 1.0 point in May but stood 4.7 points lower than a year ago. In May, the CLI for Japan decreased by 0.3 point and was 14.1 points lower than a year ago.
The CLI for the United Kingdom increased by 0.8 point in May 2009 but was 2.7 points lower than a year ago. The CLI for China rose 1.1 point in May 2009 but was 6.5 points lower than a year ago. The CLI for India increased by 1.4 point in May 2009 but was 4.4 points lower than in May 2008. The CLI for Russia was up by 0.7 point in May but was 20.7 points lower than a year ago. In April 2009 the CLI for Brazil decreased by 0.8 point and was 13.7 points lower than a year ago.
An analysis by Boston Consulting Group featured on Research Recap found that the OECD’s CLIs are a fairly good predictor of economic activity a few months in the future.
Full details available here.
Technorati Tags: CLI, economic-data, leading indicators
Analyzing the OECD’s Composite Leading Indicators, Boston Consulting Group finds that “genuine green shoots were emerging in some regions in the second quarter of 2009. However, there is nothing in the data to suggest that a strong recovery is imminent.”
BCG says the OECD’s CLIs have proven reasonably accurate in foreshadowing previous recoveries. “Outside of China, where output is already growing relatively strongly …. recovery appears more likely in the United Kingdom and parts of the eurozone.”
Strong and enduring recoveries, even in those economies displaying the “greenest shoots” would appear unlikely until the global powerhouses Japan and the United States also begin to recover.
The full analysis is available here.
Technorati Tags: CLI, economic-data, economic-forecast, leading indicators, OECD
Good news from the OECD: Major economies are getting worse more slowly:
“While it is still too early to assess whether it is a temporary or a more durable turning point, OECD composite leading indicators (CLIs) for April 2009 point to a reduced pace of deterioration in most of the OECD economies with stronger signals of a possible trough in Canada, France, Italy and the United Kingdom,” the OECD says. “The signals remain tentative but they are present in the majority of the CLI component series for these countries. Compared to last month, positive signals are also emerging in Germany, Japan and the United States. However, major non-OECD economies still face deteriorating conditions, with the exception of China and India, where tentative signs of a trough have also emerged.”
Technorati Tags: canada, china, CLI, economic-data, France, Germany, Indian Pharma, Italy, japan, leading indicators, OECD, UK-economy, US-economy
