Global| Jan 13 2025OECD LEIS Creep Ahead
The OECD seven-country LEI rose in December and is gaining at an annual rate of 1.1% over three months, up marginally from a pace of 0.9% over six months and doubling its growth rate over 12 months. Still, all of these are modest numbers. Japan’s LEI was flat in December and shows LEI declines over three months, six months and 12-months. The U.S. shows a gain of 0.2% in December with a 1.8% annual rate rise over three months, a 1.3% pace over six months and the same 0.5% gain year-over-year as for the OECD7. The index levels show an OECD7 queue standing in its 66.8 percentile, the U.S. a tad stronger at its 68.2 percentile and Japan much weaker and below tis median pace at a 36-percentile standing.
The OECD likes to judge these indicators over six months. So, I construct six-month averages, and we see the same 0.4% U.S. and OECD7 gains on this average for its change month-to-month in December and November for both. Japan turns up flat in December on this metric and shows declines over three months and 12 months. In contrast, China shows declines on this averaged gauge in December and in November but shows growing momentum from 12-months to 6-months to 3-months. The 6-month growth rate show strength in the rankings for the U.S., China, and the OECD7. But Japan also sputters in terms of growth rates on 6-month changes with a 36-percentile standing.
The amplitude adjusted metrics show only France persistently with a reading below 100 - but Japan walks the line. The ratio to six months ago shows only Japan and Germany weakening. The queue standings show only Japan and Germany, with readings below their respective medians (values below 50%).
The OECD data are not very reassuring. While conditions show basic advancing trends, they are advancing slowly with little evidence of strength. The U.S. has the strongest standing on OECD index levels and growth rates, and they are largely in the 68th and 81st percentile ranges. Germany and Japan sport 36-percentile standings for their LEI index levels on amplitude adjusted readings. These are very weak reading for two important economies.
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
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