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Benchmark Revisions - July 2007

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Released: Wednesday, November 5, 2008

The Conference Board announced today that the leading index for the U.K declined 1.1 percent, and the coincident index increased 0.1 percent in September.

  • The leading index fell sharply in September, and the index has been declining for more than a year now. Most of the components contributed negatively to the index this month, notably order book volume, the volume of expected output, and stock prices. The six-month rate of change for the index fell to - 4.7 percent (a -9.2 percent annual rate) for the period ending in September, from - 1.8 percent (a -3.5 percent annual rate) for the previous six-month period. In addition, the weaknesses among the leading indicators have remained very widespread in recent months.
  • The coincident index increased slightly in September, and index levels were revised downward for the past two months as new employment data became available. The coincident index increased 0.1 percent (a 0.2 percent annual rate) between March and September 2008, well below the 0.8 percent (a 1.5 percent annual rate) growth over the previous six months, and the weaknesses have been balanced with the strengths in recent months. At the same time, real GDP contracted at a 2.1 percent annual rate in the third quarter of 2008, sharply below the average annual increase of 0.5 percent during the first half of the year.
  • The leading index remains on a general downtrend that began in the middle of 2007, and the rate of this decline has continued to accelerate. The leading index is now 6.8 percent below its most recent high reached in June 2007. In addition, the weaknesses among the leading indicators have become very widespread this year. Meanwhile, the coincident index, which had been rising more slowly in the first half of 2008, has weakened further in recent months and has essentially been flat in the third quarter. All in all, the persistent and widespread deterioration of the leading index suggests that economic weakness will continue, and perhaps worsen somewhat further in the near term.

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

With the 1.1 percent decrease in September, the leading index now stands at 120.8 (1990=100). Based on revised data, this index declined 0.6 percent in August and declined 0.7 percent in July. During the six-month span through September, the leading index decreased 4.7 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 September. The positive contributors — from the largest positive contributor to the smallest — were employment *, real household disposable income*, and industrial production. Retail sales declined in September.

With the increase of 0.1 percent in September, the coincident index now stands at 120.1 (1990=100). Based on revised data, this index remained unchanged in August and decreased 0.1 percent in July. During the six-month period through September, the coincident index increased 0.1 percent, with two of the four components advancing (diffusion index, six-month span equals 50.0 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 November 4, 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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