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Benchmark Revisions - March 2007

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Released: Wednesday, October 24, 2007

The Conference Board announced today that the leading index for Germany declined 0.8 percent and the coincident index increased 0.1 percent in August.

  • The leading index declined sharply in August, following two consecutive increases. In August, stock prices and the consumer confidence index made very large negative contributions, and the yield spread component became inverted in August for the first time since March 2001, making a small negative contribution to the index. With August's decline, the leading index grew 0.1 percent from February to August (about a 0.2 percent annual rate), down from about 2.0 percent in May and June, and below the 0.5 percent average growth in the first quarter. In addition, the strengths and the weaknesses among the leading indicators have been somewhat balanced in recent months.
  • The coincident index increased again in August. Industrial production made a large positive contribution, but this was offset by a large negative contribution from retail trade. The coincident index grew by 0.7 percent (almost a 1.5 percent annual rate) from February to August, slightly slower than earlier in the year. In addition, the strengths among the coincident indicators were more widespread than the weaknesses in recent months.
  • Following slower growth at the end of 2006 and the beginning of 2007, the leading index grew more rapidly through mid-2007, but its growth has moderated somewhat in the last two months. At the same time, during the first half of 2007, real GDP grew at a 1.6 percent average annual rate (including a 1.0 percent annual rate in the second quarter), well below the 3.1 percent average annual rate of growth in the second half of 2006. The behavior of the leading and coincident indexes so far still suggests that slow to moderate economic growth should continue in the near term.

LEADING INDICATORS. Three of the seven components in the leading index increased in August. The positive contributors to the leading index — in order from the largest positive contributor to the smallest — are inventory change series*, new residential construction orders* and new orders in investment goods industries. The negative contributors — in order from largest to smallest — are stock prices, consumer confidence and yield spread. Gross enterprises and properties income* remained unchanged in August.

With the 0.8 percent decrease in August, the leading index now stands at 99.0 (1990=100). Based on revised data, this index increased 0.1 percent in July and increased 0.6 percent in June. During the six-month span through August, the leading index increased 0.1 percent, with four of the eight components increasing (diffusion index, six-month span equals 57.1 percent).

COINCIDENT INDICATORS. Two of the four components that make up the coincident index increased in August. The positive contributors to the coincident index were industrial production and employed persons. Retail trade and manufacturing sales declined in August.

With the 0.1 percent increase in August, the coincident index now stands at 109.6 (1990=100). Based on revised data, this index increased 0.3 percent in July and increased 0.1 percent in June. During the six-month period through August, the coincident index increased 0.7 percent, with three of the four components increasing (diffusion index, six-month span equals 75.0 percent).

DATA AVAILABILITY The data series used to compute the two composite indexes reported in this release are those available "as of" 10:00 A.M. ET October 22, 2007. Some series are estimated as noted below.

NOTES: Series in the leading index for Germany that are based on The Conference Board estimates are inventory change, new residential construction orders, and gross enterprises and properties income. There are no series in the coincident index for Germany that are based on The Conference Board estimates.

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

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