Economy still 'worsening' despite slight rise in index: report

The key gauge of the current state of the economy rose 0.1 point in September from the previous month with improvements in industrial production and shipment indicators, the government said Thursday.

Despite the slight rise in the index, the government maintained its assessment made in June that the economy is "worsening" — its most pessimistic evaluation. The composite index of coincident economic indicators stood at 100.8 against 100 for the base year of 2005, the Cabinet Office said in a preliminary report.

A Cabinet Office official said the index's three-month moving average for coincident indicators fell for the second straight month to 101.7 in September, prompting the government to keep its basic view.

"Although the index's single-month movement was almost flat, the moving average clearly shows a downtrend. That is why we left unchanged the evaluation that the economy is worsening," the official said.

The index of leading indicators, which predicts developments several months down the road, came to 89.2, up 0.2 point from August. The index of lagging indicators, which measures economic performance in the recent past, stood at 99.5, down 1.0 point.

The office set the composite index as the key gauge starting from its April survey instead of the diffusion index on grounds that the CI is more helpful in gauging the degree and pace of change in each indicator.