A key gauge of the current state of the economy stood above the boom-or-bust threshold of 50 percent in February for the seventh-straight month, spurred mainly by improvement in employment conditions, the government said Thursday.

The index of coincident economic indicators came to 55.6 percent, the Cabinet Office said in a preliminary report.

A reading above 50 percent is considered a sign of economic expansion and a figure below that line is seen as a sign of contraction.

The government maintained its assessment of the economic situation for the ninth month, saying the index "shows improvements in Japan's economy."

The index of leading indicators, predicting economic developments about six months down the road, stood at 80.0 percent, moving above the threshold line three months in a row, suggesting the economic recovery is expected to continue for the time being.

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 large-lot electricity use, overtime hours, sales by wholesalers, the job offers-to-seekers ratio and retail sales.

The indicators of overtime hours and the job offers-to-seekers ratio logged the highest levels in the current economic recovery, which began February 2002, an official at the Cabinet Office said.

On the other hand, four indicators related to industrial production fell in February, reflecting a dip in the industrial production index for February, which was released by the Ministry of Economy, Trade and Industry in late March.

But the official downplayed the development, saying METI forecasts production will show March-April improvement and the index of coincident economic indicators stayed above the 50-percent line.

The diffusion indexes compare the levels of various economic data for a reporting month with levels three months earlier.