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For Release 9:30 AM ET, September 18, 2024
Using the Composite Indexes: The Leading Economic Index (LEI) provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term. The Coincident Economic Index (CEI) provides an indication of the current state of the economy. Additional details are below.
The Conference Board Leading Economic Index® (LEI) for France ticked down by 0.1 percent in July 2024 to 108.9 (2016=100), after declining by 0.3 percent in June. As a result, the LEI contracted by 2.7 percent over the six-month period between January and July 2024, a larger contraction than the 2.0 percent decline between July 2023 and January 2024.
The Conference Board Coincident Economic Index® (CEI) for France was unchanged at 111.1 (2016=100) in July 2024, after rising by 0.1 percent in June. The CEI for France progressed by only 0.1 percent over the six-month period from January to July 2024, after rising by 0.2 percent over the previous six-month period.
“The France LEI ticked down slightly in July, marking the thirteenth consecutive month of decline,” said Allen Li, Associate Economist at The Conference Board. “Both financial components of Index declined along with components related to industrial production. However positive developments in new unemployment claims and building permits limited the overall decline in the Index. Over the past six months most components of the France LEI remained weak, and the trajectory of the Index continues to warn of headwinds ahead. Taking into account the on-going political uncertainty and the mounting fiscal challenges, the Conference Board currently expects France GDP growth to moderate in the second half of the year and grow by about 1.0 percent in 2024.”
The next release is scheduled for Thursday, October 17, 2024, at 9:30 A.M. ET.
NOTE: The chart illustrates the so-called 3Ds—duration, depth, and diffusion—for interpreting a downward movement in the LEI. Duration refers to how long the decline has lasted. Depth denotes the size of decline. Duration and depth are measured by the rate of change of the index over the most recent six months. Diffusion is a measure of how widespread the decline is among the LEI’s component indicators—on a scale of 0 to 100, a diffusion index reading below 50 indicates most components are weakening.
The 3Ds rule signals an impending recession when: 1) the diffusion index lies below 50, shown by the black warning signal lines in the chart; and 2) the LEI’s six-month rate of decline falls below the threshold of −2.1 percent. The red recession signal lines indicate months when both criteria are met simultaneously—and thus that a recession is likely imminent or underway.
About The Conference Board Leading Economic Index® (LEI) and Coincident Economic Index® (CEI) for France
The composite economic indexes are key elements in an analytic system designed to signal peaks and troughs in the business cycle. Comprised of multiple independent indicators, the indexes are constructed to summarize and reveal common turning points in the economy in a clearer and more convincing manner than any individual component.
The CEI reflects current economic conditions and is highly correlated with real GDP. The LEI is a predictive tool that anticipates—or “leads”—turning points in the business cycle by around twelve months.
The seven components of Leading Economic Index® for France are:
The four components of the Coincident Economic Index® for France are:
To access data, please visit: https://data-central.conference-board.org/
About The Conference Board
The Conference Board is the member-driven think tank that delivers Trusted Insights for What’s Ahead™. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. ConferenceBoard.org
June’s decline in the LEI was largely contained to negative contributions from the financial components
With graph and summary table
September 17, 2024
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