18 October 2001, 10:01  Japan's key economic gauge stays at 0% in Aug. after revision

TOKYO, Oct. 18 (Kyodo) - The government said Thursday its key gauge of the state of the economy remained at zero in August following a revision of the preliminary report released earlier in the month. The diffusion index of coincident indicators, designed to measure the current state of the economy, stood at 0.0% in the reporting month for the first time since March 1998, the Cabinet Office said. A reading above 50% is considered a sign of economic expansion, while a reading below that level indicates contraction. The Cabinet Office said the index of leading indicators, a measure of economic growth six to nine months down the road, was revised downward to 55.6% from a preliminary 71.4%. The index of lagging indicators, which gauges economic performance in the recent past, was also revised downward, coming to 14.3% from 16.7%. Ten of the 11 component coincident indicators available at present were in the minus column for August, including raw material consumption and capacity utilization by manufacturers. Among the 11 component leading indicators, four were in negative territory, while six of the eight component lagging indicators were negative, the Cabinet Office said. The diffusion indexes of the coincident, leading and lagging indicators compare the current levels of various economic indicators with their levels three months earlier.

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