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Benchmark Revisions - May 2006

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Released: Thursday, September 13, 2007

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

  • The leading index increased slightly in July, and the small decline previously reported for June was revised up to no change as a result of data revisions. Despite July's small gain, the six-month growth rate of the leading index continued to fluctuate around zero percent growth and the leading index grew 0.1 percent (about a 0.2 percent annual rate) from January to July. This is well below the 5.0 to 6.0 percent annual rate through the third quarter of 2006.
  • The coincident index also increased slightly in July, but there were slight downward revisions in the previous several months as quarterly data for the employment and wages and salaries components became available. The strengths among the coincident indicators have continued to be widespread, but its six month growth rate has moderated somewhat in recent months; the coincident index grew 0.7 percent from January to July (about a 1.4 percent annual rate), down from about 1.6 percent (3.2 percent annual rate) in February.
  • The leading index has been essentially flat since January and the strengths and weaknesses among the leading indicators have been balanced in recent months. At the same time, real GDP grew at a 1.7 percent average annual rate in the first half of 2007 (including a 1.3 percent rate in the second quarter). The recent behavior of the leading and coincident indexes still suggests that economic growth should continue, but perhaps at a slow to moderate pace in the near term.

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

With the increase of 0.1 percent in July, the leading index now stands at 129.1 (1990=100). Based on revised data, this index remained unchanged in June and declined 0.1 percent in May. During the six-month span through July, the leading index increased 0.1 percent, and three of the seven components increased (diffusion index, six-month span equals 50.0 percent).

COINCIDENT INDICATORS. Two of the four components of the coincident index increased in July. The positive contributors to the index were industrial production and wage and salaries*. Personal consumption declined, while employment* remained unchanged in July.

With the increase of 0.2 percent in July, the coincident index now stands at 122.2 (1990=100). Based on revised data, this index remained unchanged in June and increased 0.1 percent in May. During the six-month period through July, the coincident index increased 0.7 percent, with all four series making a positive contribution (diffusion index, six-month span equals 100.0 percent).

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

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 September 11, 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 us here at 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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