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Benchmark Revisions - March 2007

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Released: Tuesday, November 20, 2007

The Conference Board announced today that the leading index for Germany declined 1.0 percent and the coincident index increased 0.2 percent in September.

  • The leading index decreased again in September, the third consecutive decline. New orders for investment goods industries and consumer confidence in September were the main negative contributors to the leading index. Additionally, the yield spread was inverted for a second consecutive month and made its largest negative contribution to the leading index since October 1993. With September's decline, the leading index fell 0.6 percent between March and September (a 1.2 percent annual rate), down from the 2.0 percent increase the leading index experienced during the first half of 2007 (about a 4.1 percent annual rate). In addition, the strengths among the leading indicators have become less widespread and more balanced with the weaknesses in recent months.
  • The coincident index increased for the fourth consecutive month in September, following no change in both April and May. Retail trade and employed persons were the largest positive contributors. Between March and September, the coincident index grew by 0.6 percent (about a 1.3 percent annual rate), well below the 1.5 percent growth (about a 3.0 percent annual rate) between September 2006 and March 2007. In addition, the strengths among the coincident indicators have been more widespread than the weaknesses in recent months.
  • While the leading index grew rapidly through the second quarter of this year, it has fallen substantially during the third quarter. Real GDP has grown at an average annual rate of 1.9 percent during the past two quarters, (including a 2.8 percent annual rate in the third quarter), gradually slowing from the 4.4 percent average annual growth rate in the first half of 2006. The current behavior of the leading and coincident indexes still suggests that economic growth should continue in the near term, albeit at a slow to moderate pace.

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

With the 1.0 percent decrease in September, the leading index now stands at 97.9 (1990=100). Based on revised data, this index declined 0.6 percent in August and declined 0.2 percent in July. During the six-month span through September, the leading index decreased 0.6 percent, with four of the seven components increasing (diffusion index, six-month span equals 57.1 percent).

COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in September. The positive contributors to the coincident index were retail trade, employed persons and industrial production. Manufacturing sales declined in September. With the 0.2 percent increase in September, the coincident index now stands at 109.8 (1990=100). Based on revised data, this index increased 0.1 percent in August and increased 0.3 percent in July. During the six-month period through September, the coincident index increased 0.6 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 November 16, 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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