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Benchmark Revisions - July 2007

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Released: Wednesday, April 9, 2008

The Conference Board announced today that the leading index for the U.K declined 0.3 percent, and the coincident index increased 0.2 percent in February.

  • The leading index declined again in February, the seventh decrease in the index in the last eight months. Consumer confidence and order book volume made large negative contributions in February. The six-month change in the leading index decreased to -1.2 percent (a -2.5 percent annual rate) during the six-month span through February, down from -0.9 percent (a -1.8 percent annual rate) at the end of 2007. In addition, the weaknesses among the leading indicators have become very widespread in recent months.
  • The coincident index continued to increase in February, the seventh straight monthly increase in the index. Employment continued to make the largest positive contribution to the index this month. The coincident index increased 1.3 percent (a 2.5 percent annual rate) from August 2007 to February 2008, slightly faster than its six-month growth rate of 1.1 percent (a 2.2 percent annual rate) in December 2007. In addition, the strengths among its components have remained fairly widespread in recent months.
  • Since the middle of 2007, the leading index has been on a downward trend, after rising rapidly throughout 2006 and the first half of 2007, with the weaknesses spreading among its components in recent months. Meanwhile, the coincident index, a measure of current economic activity, has continued to increase at a fairly steady pace since the beginning of 2007. Real GDP grew at a 2.5 percent average annual rate in the second half of 2007, down from an average annual rate of 3.1 percent in the first half. The recent behavior of the leading index suggests that slower economic activity is likely in the near term.

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

With the 0.3 percent decrease in February, the leading index now stands at 127.6 (1990=100). Based on revised data, this index declined 0.3 percent in January and declined 0.4 percent in December. During the six-month span through February, the leading index decreased 1.2 percent, with two of the seven components advancing (diffusion index, six-month span equals 28.6 percent).

COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in February. 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 February.

With the increase of 0.2 percent in February, the coincident index now stands at 120.3 (1990=100). Based on revised data, this index increased 0.2 percent in January and increased 0.3 percent in December. During the six-month period through February, the coincident index increased 1.3 percent, with three of the four components advancing (diffusion index, six-month span equals 87.5 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 April 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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