Leading indicator indices published recently by the Conference Board (CB) point towards moderate growth in the United Kingdom, a slight improvement of the perspectives for South Korea and a growth slowdown for Japan. The Cabinet Office index of leading indicators gives the same trend than the CB one for Japan's economy. Moreover, the consumer confidence index in Japan decreased in November for a fifth month in a row.
For the United States, the weekly leading index developed by the Economic Cycle Research Institute keeps showing a gradual increase, which means an improvement in the economic conditions in the coming months. The most recent CB forecast for the USA sends a cold shower : it indicates a significant growth slowdown in the next quarters. For 2011 as a whole, growth would be only 1.7 %, compared to 2.8 % in 2010. Not all forecasters share such a pessimism : the different organizations that are part of the poll of forecasters consulted by The Economist (December 11 edition) have a range of forecasts that go from a low of 1.5 % to a high of 3.2 %. December 27 update : after the adoption by the US Congress of expansionary fiscal measures, the CB forecast for GDP growth in 2011 was revised upward, going from 1.7 % to 2.3 %.
In Canada, housing starts increased in November compared to October, but the trend remains downward. Then, the residential construction industry will not contribute to economic growth in the coming months. More globally, the Bank of Canada expressed again its worries concerning the evolution of consumers debt in Canada and sovereign debt in many countries, and the consequences of their eventual deterioration on the economy. The Desjardins Leading Index for Quebec increased significantly in October after months of quasi-stagnation. A few more months of increase will be needed to conclude at an improvement of the perspectives.
In China, the People's Bank ordered, for a third time in five weeks, an increase in the banks reserves to limit the growth of credit and decrease inflation pressures. Also, for the same purpose, an interest rate increase is expected in the coming days or weeks.
Stock markets indices around the world increased during the week supporting again, as leading indicators, the perspective that the world economy should keep expanding in the coming months. Seventeen of the twenty two most followed indices showed an increase.
During the coming days, leading indicators indices will be published by the OECD, Statistics Canada and the Conference Board (USA and China).
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