A key economic gauge remained above the boom-or-bust threshold of 50 percent in September for the second straight month, spurred by brisk industrial output and large-lot electricity consumption, the government said Monday.
The index of coincident economic indicators stood at 55.6 percent, down from 80.0 percent in August, the Cabinet Office said in a preliminary report.
A reading above 50 percent is considered a sign of economic expansion. A figure of less than 50 percent points to a slowdown.
Despite the drop in the index, the Cabinet Office left its economic assessment unchanged for the third straight month, saying the index shows improvements in the economy.
Looking ahead, a Cabinet Office official said he expects the index of coincident economic indicators for October to remain above the 50 percent threshold , alluding to a sustained recovery of the economy.
Of the 11 indicators used to calculate the coincident index, nine were available for the preliminary report, of which five showed positive readings.
The five are industrial production, the job offers-to-seekers ratio, sales by wholesalers, the index of industrial goods production and large-lot electricity consumption.
The indicators for industrial goods production and large-lot electricity use reached record levels in September.
The index of leading indicators, which points to economic developments about six months down the road, was at 50.0 percent, down from 100.0 percent in August, but the index remained out of recessionary territory for the second consecutive month.
The Cabinet Office official said the leading index is likely to move back above 50 percent in October, given rises in Japanese share prices and brisk housing sales in urban areas.
The index of lagging indicators, designed to measure economic performance in the recent past, was at 25.0 percent, down from 80.0 percent.
The diffusion indexes compare the levels of various economic data for a reporting month with levels three months earlier.