| Share gazing: Japanese Prime Minister Junichiro Koizumi (centre) looks up at share prices as he tours the Tokyo Stock Exchange on Friday. (Reuters)
Paris, Oct 4 (Reuters): Confirming a turn for the worse in global economic prospects, the Paris-based OECD has issued an early warning indicator which pointed to slower times ahead in the United States and Europe.
The Organisation for Economic Co-operation and Development’s so-called leading indicator for August slid for the second month in a row for the United States, by 0.5 points to 118.3.
It also fell, for a third month running, for the euro area, by 0.3 points to 113.1, the OECD said in a statement on Friday. There were heavy falls for Germany and France, which together account for more than 50 percent of the 12-nation group’s economic output.
The index, designed to offer a forward-looking gauge of what is in store from the global economy, slid in Germany by a full point to 113.8 from 114.8 and France by even more, to 107.0 from 108.1.
Among others in the Group of Seven club of leading economic powers, Japan bucked the trend with a small rise to 108.6 from 108.5, and Italy too, nudging up to 104.3 from 103.9.
Of the two other G7 members, Canada, slipped slightly to 125.4 from 125.5 and Britain to 114.4 from 114.7.
The OECD, whose membership spans 30 mostly rich economies in all, said its aggregate index for the OECD as a whole dipped to 116.2 from 116.3, while the aggregate index for the G7 group dropped to 113.9 from 114.3.
The latest readout from the OECD confirmed what analysts have been saying for weeks, that the big economies appeared to have lost steam in late summer, raising added doubts about a long-predicted recovery from the downturn which began in 2000.
A string of other economic reports from Europe this week also showed continued strains. A survey of the euro zone service sector showed further shrinkage and a rise in job cuts in September, despite other big European countries outside the euro zone, namely Britain, bucking the trend. A similar picture emerged earlier this week in a string of economic indicators published by the European Commission on the 12-nation euro zone and the wider 15-member European Union.
With a flood of often mixed signals in Europe, Japan and the United States, and continued turmoil in stock markets across the globe, economists are still trying to figure out whether the world economy has “paused to catch its breath” or in danger of a second downturn.