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Benchmark Revisions - March 2007

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Released: Tuesday, January 22, 2008

The Conference Board announced today that the leading index for Germany remained unchanged and the coincident index decreased 0.1 percent in November.

  • The leading index was unchanged in November after a large increase in October following decreases in August and September. New orders for investment goods made a large contribution to the leading index in November, but this was offset by negative contributions from stock prices and consumer confidence. Interest rate spread also made a negative contribution in November, remaining below zero for a fourth consecutive month. The leading index has been relatively flat overall in the second half of 2007 and it grew only 0.4 percent during the last six months (May to November, about a 0.8 percent annual growth rate) down from a 1.8 percent increase for the previous six months (November 2006 to May 2007, about a 3.7 percent annual rate). Additionally, the number of components of the index that are increasing has fallen recently and the strengths and weaknesses among the leading indicators have become roughly balanced.
  • The coincident index fell for a second consecutive month as a result of declines in both industrial production and retail trade which more than offset small increases in employed persons and manufacturing sales. Between May and November, the coincident index increased by 0.4 percent (about a 0.7 percent annual rate) down from a 1.0 percent growth rate (about a 2.0 percent annual rate) for the previous six months from November 2006 to May 2007.
  • The leading index has been volatile since May, fluctuating around a rising trend which appears to be gradually slowing in the second half of 2007. The leading index has declined slightly since July, after growing at a faster pace during the first half of 2007. In contrast, real GDP growth picked up from a 1.6 percent average annual rate during the first half of the year, to a 2.8 percent annual rate in the third quarter. 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 November. The positive contributors to the leading index — in order from the largest positive contributor to the smallest — are new orders in investment goods industries, inventory change series*, and gross enterprises and properties income*. Negative contributors — in order from largest to smallest — are stock prices, consumer confidence and yield spread. New residential construction orders* remained unchanged in November.

After remaining unchanged in November, the leading index now stands at 99.5 (1990=100). Based on revised data, this index increased 0.6 percent in October and declined 0.9 percent in September. During the six-month span through November, the leading index increased 0.4 percent, with three of the seven components increasing (diffusion index, six-month span equals 50.0 percent).

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

With the 0.1 percent decrease in November, the coincident index now stands at 109.5 (1990=100). Based on revised data, this index decreased 0.1 percent in October and increased 0.1 percent in September. During the six-month period through November, the coincident index increased 0.4 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 January 18, 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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