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Benchmark Revisions - May 2006

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Released: Thursday, July 12, 2007

The Conference Board reports today that the leading index for France declined 0.1 percent and the coincident index increased 0.2 percent in May.

  • The leading index decreased slightly in May, and there were downward revisions in the previous several months as new data became available for the ratio of the deflator of value added to unit labor cost in manufacturing. In May, large positive contributions from stock price, yield spread, and building permits were offset by negative contributions from industrial new orders, new unemployment claims (inverted), production expectations, and the ratio deflator of value added to unit labor cost. The six-month growth rate of the leading index dropped to -0.3 percent (about a -0.6 percent annual rate from November to May), and it has been fluctuating around zero in recent months.
  • The coincident index increased slightly again in May and there were small upward revisions to previous months as new data became available for the employment and wage and salaries components. The six month growth rate of the coincident index has picked up to about a 3.0 to 3.5 percent annual rate in recent months, up from about a 1.0 to 2.0 percent annual rate in 2006. In addition, the strengths among the coincident indicators have been very widespread.
  • The leading index grew very rapidly in 2006, but it has been essentially flat since December 2006 with the strengths and weaknesses among the leading indicators roughly balanced since then. At the same time, real GDP grew at a 2.2 percent annual rate (revised) in the first quarter, up from 1.0 percent (average annual rate) in the second half of 2006. The recent behavior of the leading and coincident indexes still suggests slow to moderate economic growth should continue in the near term.

LEADING INDICATORS. Three of the seven components of the leading index increased in May. The positive contributors to the index — in order from the largest positive contributor to the smallest — are the stock price index, building permits (residential), and the yield spread. The negative contributors to the index — beginning with the largest negative contributor — are industrial new orders, the inverted new unemployment claims, production expectations, and the ratio of the deflator of manufacturing value added to unit labor cost for manufacturing*.

With the decrease of 0.1 percent in May, the leading index now stands at 129.0 (1990=100). Based on revised data, this index declined 0.1 percent in April and increased 0.3 percent in March. During the six-month span through May, the leading index decreased 0.3 percent, and four of the seven components increased (diffusion index, six-month span equals 57.1 percent).

COINCIDENT INDICATORS. Three of the four components of the coincident index increased in May. The positive contributors to the index were employment*, wage and salaries*, and industrial production. Personal consumption declined in May.

Please also visit the web site of our research associate in France: http://www.rexecode.fr/index.jsv.

With the increase of 0.2 percent in May, the coincident index now stands at 122.7 (1990=100). Based on revised data, this index increased 0.1 percent in April and increased 0.3 percent in March. During the six-month period through May, the coincident index increased 1.8 percent, with all of the four series making a positive contribution (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 July 10, 2007. Some series are estimated as noted below.

NOTES: Series in the leading index that are based on The Conference Board estimates are ratio deflator of manufacturing value added to unit labor cost in manufacturing. Series in the coincident index that are based on The Conference Board estimates are number of employees and wage and salaries.

With the May 2006 release the FRANCE LEADING ECONOMIC INDICATORS AND RELATED COMPOSITE INDEXES underwent a benchmark revision. For more information on these benchmark revisions please visit http://www.conference-board.org/economics/bci/update.cfm?cid=3.

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

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