The key gauge of the current state of the economy dipped below the boom-or-bust line of 50 percent in November for the first time in 10 months due chiefly to a decline in industrial output, the government said Friday.

The index of coincident economic indicators stood at 33.3 percent, after registering 90 percent in October, the Cabinet Office said in a preliminary report.

A reading below 50 percent is considered a sign of economic contraction, while a figure above is seen as a sign of expansion.

An indicator on industrial production showed the first downswing in 10 months and that on industrial shipments the first drop in 11 months, causing five of the nine available component indicators of the coincident index to turn down in the latest reporting month.

But the government believes the index would have topped the 50 percent line had some temporary factors been discounted, said Yoshihiko Senoo, a chief economist at the office’s Economic and Social Research Institute.

“It is still a move of one month and we cannot immediately decide whether the economy’s improving trend has changed from this,” the official said. “The clear improving trend seen before has faded, but we cannot say the direction has changed.”

The official added that the index is likely to recover somewhat to a level close to 50 percent in December, although it remains to be seen which side of the threshold it ends at.

“We need to closely monitor moves ahead of production data as they remain uncertain,” he said.

Meanwhile, the index of leading indicators, measuring economic moves about six months ahead, recouped to 72.2 percent after scoring 40 percent in October for the first dip below 50 percent in 10 months.

But the latest leading index may also be overvalued on temporary factors, Senoo warned.

The leading index has zigzagged across the 50 percent mark for four months since hitting the threshold in August, suggesting that the coincident index may follow such a path in the future, the official said.

“Taking into account the moves of the leading index, the coincident index may seesaw,” he said.

The index of lagging indicators, designed to gauge economic performance in the recent past, was 66.7 percent, the first figure above the 50 percent mark in five months.

The diffusion indexes compare the current levels of various economic data with levels three months earlier.

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