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Benchmark Revisions - July 2007

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Released: Tuesday, March 11, 2008

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

  • The leading index declined again in January, the sixth decrease in the index in the last seven months. Order book volume made a large positive contribution to the index in January, but this increase was more than offset by the large declines in stock prices, consumer confidence and the yield spread. The six-month change in the leading index — from July 2007 to January 2008 — has fallen to -1.3 percent (a -2.6 percent annual rate), down from a 2.0 percent rate (a 4.0 percent annual rate) between January to July 2007. In addition, the weaknesses among the leading indicators have become slightly more widespread than the strengths in recent months.
  • The coincident index continued to increase in January, the sixth consecutive monthly increase in the index. In January, employment continued to make the largest contribution to the index. The coincident index rose 1.0 percent (a 2.0 percent annual rate) from July 2007 to January 2008, roughly in line with its six-month growth rate of 0.8 to 0.9 percent (about a 1.7 to 1.9 percent annual rate) in recent months, and the strengths among its components remained fairly widespread.
  • The leading index has been on a general downtrend since the middle of 2007, and the rate of its decline has picked up in recent months, while the coincident index has continued to increase at a modest pace. Meanwhile, real GDP growth slowed to a 2.2 percent annual rate in the fourth quarter of 2007, down from an average annual rate of growth of 3.1 percent during the second and third quarters of the year. The recent behavior of the composite indexes suggests that slow economic activity is likely to continue in the near term.

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

With the 0.2 percent decrease in January, the leading index now stands at 127.7 (1990=100). Based on revised data, this index declined 0.5 percent in December and declined 0.4 percent in November. During the six-month span through January, the leading index decreased 1.3 percent, with three of the seven components advancing (diffusion index, six-month span equals 42.9 percent).

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

With the increase of 0.2 percent in January, the coincident index now stands at 119.8 (1990=100). Based on revised data, this index increased 0.1 percent in December and increased 0.2 percent in November. During the six-month period through January, the coincident index increased 1.0 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 March 7, 2008. 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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