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Benchmark Revisions - May 2006

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Released: Monday, April 21, 2008

The Conference Board reports today that the leading index for France declined 0.3 percent and the coincident index increased 0.2 percent in February.

  • The leading index declined for the fifth consecutive month in February. New unemployment claims (inverted) and the stock price index made large negative contributions to the index this month. Index levels were revised slightly downward between September and January as fourth quarter data became available for the ratio deflator of value added to unit labor costs and as a result of revisions to unemployment claims. The six-month change in the leading index fell to -1.8 percent (about a -3.5 percent annual rate) during the six-month span through February, well below the six-month change of 1.6 percent (about a 3.1 percent annual rate) during the six-month span from February 2007 to August 2007. In addition, the weaknesses among the leading indicators have become very widespread.
  • The coincident index, a measure of current economic activity, increased again in February. All components contributed to the index positively this month. The six-month growth rate of the coincident index increased to 0.6 percent (about a 1.1 percent annual rate) during the six-month span through February. In addition, strengths among the coincident indicators have been very widespread in recent months.
  • Since reaching a high in the middle of 2007, the leading index has been on a general downtrend. Meanwhile, the coincident index continues to show positive growth, albeit at a slow pace. Real GDP grew at a 2.3 percent average annual rate in the second half of 2007, (including a 1.5 percent annual growth rate in the fourth quarter), an increase from an average annual growth rate of 1.9 percent in the first half of 2007. The current behavior of the leading and coincident indexes suggests that more moderate economic growth is likely to continue in the near term.

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

With the decrease of 0.3 percent in February, the leading index now stands at 128.5 (1990=100). Based on revised data, this index declined 0.5 percent in January and declined 0.6 percent in December. During the six-month span through February, the leading index decreased 1.8 percent, and one of the seven components increased (diffusion index, six-month span equals 14.3 percent).

COINCIDENT INDICATORS. All four components of the coincident index increased in February. The positive contributors to the index were employment*, personal consumption, wage and salaries*, and industrial production.

With the increase of 0.2 percent in February, the coincident index now stands at 123.3 (1990=100). Based on revised data, this index increased 0.1 percent in January and increased 0.2 percent in December. During the six-month period through February, the coincident index increased 0.6 percent, with four of the four series making a positive contribution (diffusion index, six-month span equals 100.0 percent).

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

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