The OECD composite leading indicators (CLIs), released yesterday by the 30-nation Organization for Economic Cooperation and Development, are showing “tangible signs of an improvement” in the outlooks for most OECD economies.
Composite Leading Indicators, OECD-Total
Possible trough in the OECD area
Potential recovery signals are emerging in Italy and France, with indications of troughs beginning in Canada, the UK, the US, China and India, the OECD said. The trough signals are more tentative in Russia.
The CLI for the OECD area increased by 0.8 points in May, while the CLI for the US increased by 1.0 point, extending a 0.3 point rise in April.
Sentiment in the US appears to be painting a different picture, however. US equities are off June’s high, Treasury yields have fallen, and speculators have begun to flee the crude oil market.
But the data are telling a different story. Both the ISM Manufacturing Index and the ISM Non-Manufacturing Index continue to suggest the recession is easing in the US, the Leading Index has posted strong gains, and weekly jobless claims, which is a superb indicator of economic activity, is still slowly coming off its peak.
In addition, the latest information on the US trade gap revealed a modest pick up in exports, which may be another anecdotal sign of firming demand in Asia.
For a more detailed breakdown, see CLI continues to show signs of improvement.
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