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Benchmark Revisions - July 2007

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Released: Tuesday, August 16, 2005

The Conference Board announced today that the leading index for the U.K. decreased 0.4 percent, while the coincident index increased 0.2 percent in June.

  • The leading index fell for the fourth consecutive month in June, and the weakness among the leading indicators continued to be widespread. The leading index was essentially flat in the second half of 2004, and although it rose slightly at the end of the year, this strength was not sustained in the first half of 2005. The growth rate of the leading index has slowed to about a -2.0 percent annual rate in recent months, down from the peak growth rate of almost 7.0 percent reached by mid-2004.
  • The coincident index, a measure of current economic activity, increased slightly again in June. The growth rate of the coincident index has moderated since mid 2004; it is now growing at less than a 1.0 percent annual rate down from about 2.0 percent. Strength in the disposable income and sales components of the coincident index was offset by the lack of growth in the industrial sector and employment this year.
  • At the same time, real GDP growth slowed to a 1.5 percent average annual rate in the first half of 2005 (including a 1.5 percent rate in the second quarter) and has increased at a 1.8 percent average rate over the last three quarters, down from a 3.7 percent average rate in the second half of 2003 and first half of 2004. The continued weakness in the leading index in recent months indicates that economic growth is likely to remain sluggish in the near term.
  • Leading Indicators.Four of the eight components that make up the leading index increased in June. The positive contributors – from the largest positive contributor to the smallest – were the fixed interest price index, stock prices, productivity for the whole economy*, and operating surplus of corporations*. Order book volume, volume of expected output, consumer confidence, and new orders for engineering industries* declined in June.

    With the 0.4 percent decline in June, the leading index now stands at 132.4 (1990=100). Based on revised data, this index declined 0.6 percent in May and declined 0.5 percent in April. During the six-month span through June, the leading index declined 1.0 percent, with three of the eight components advancing (diffusion index, six-month span equals 37.5 percent).

    Coincident Indicators.Three of the four components that make up the coincident index increased in June. The positive contributors – from the largest positive contributor to the smallest – were retail sales, employment*, and real household disposable income*. Industrial production declined in June.

    With the increase of 0.2 percent in June, the coincident index now stands at 115.7 (1990=100). Based on revised data, this index increased 0.1 percent in both May and April. During the six-month period through June, the coincident index increased 0.4 percent, with three of the four components advancing (diffusion index, six-month span equals 75.0 percent).

    Data Availability.The data series used by The Conference Board to compute the two composite indexes reported in the tables in this release are those available “as of” 10 A.M. ET on August 15, 2005. Some series are estimated as noted below.

    NOTES: Series in the leading index that are based on The Conference Board estimates are new orders in engineering industries, productivity of the whole economy, and operating surplus of corporations. Series in the coincident index that are based on The Conference Board estimates are employment and real household disposable income.

    THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.

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