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Benchmark Revisions - July 2007

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Released: Monday, December 10, 2007

The Conference Board announced today that the leading index for the U.K increased 0.2 percent, and the coincident index increased 0.1 percent in October.

  • The leading index increased slightly in October, following three consecutive monthly declines. Stock prices and productivity provided most of the gains in the index this month, while the yield spread was the only negative contributor in October. The six-month growth rate of the leading index continued to slow, decreasing to 0.2 percent (a 0.3 percent annual rate) from the 1.5 to 2.5 percent pace in the first half of the year. In addition, the six-month diffusion index suggests that the strengths among its components have only been slightly more widespread than the weaknesses in recent months.
  • The coincident index increased again in October, and it has been rising at a steady pace since the beginning of the year. Except for retail sales, which were unchanged for the month, all coincident indicators made positive contributions to the index in October. Employment has made the largest positive contributions in the last three months. The coincident index increased 0.7 percent (a 1.4 percent annual rate) from April to October, in line with the six-month growth rate that prevailed during the third quarter. Also, the strengths among the coincident indicators remained very widespread.
  • The leading index has declined slightly from the recent high reached in June and the strengths among the leading indicators have become somewhat less widespread in recent months. At the same time, real GDP grew at a (downwardly revised) 2.9 percent annual rate in the third quarter, moderately slower than the 3.3 percent average annual rate of growth in the first half of 2007. The recent behavior of the composite indexes suggests that economic growth should continue in the near term, but perhaps at a slow pace.

LEADING INDICATORS. Four of the seven components that make up the leading index increased in October. The positive contributors — from the largest positive contributor to the smallest — were stock prices, productivity for the whole economy*, operating surplus of corporations, and consumer confidence. The only negative contributor was the yield spread. Order book volume and volume of expected output remained unchanged in October.

With the 0.2 percent increase in October, the leading index now stands at 129.4 (1990=100). Based on revised data, this index declined 0.1 percent in September and declined 0.2 percent in August. During the six-month span through October, the leading index increased 0.2 percent, with four of the eight components advancing (diffusion index, six-month span equals 57.1 percent).

COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in October. The positive contributors — from the largest positive contributor to the smallest — were employment *, real household disposable income*, and industrial production. Retail sales remained unchanged in October.

With the increase of 0.1 percent in October, the coincident index now stands at 119.1 (1990=100). Based on revised data, this index increased 0.1 percent in September and increased 0.2 percent in August. During the six-month period through October, the coincident index increased 0.7 percent, with all of the four components advancing (diffusion index, six-month span equals 100.0 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 December 6, 2007. Some series are estimated as noted below.

* Series in the leading index that are based on The Conference Board estimates are 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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