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Benchmark Revisions - November 2006

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Released: Monday, May 12, 2003

The Conference Board reports today that the leading index for Japan decreased 0.2 percent and the coincident index decreased 0.1 percent in March.

  • The leading index increased in the beginning of 2002, has been essentially flat for six months, and has decreased in three out of the last four months. Weakness in the leading index has been primarily due to declines in the stock market and labor productivity.
  • As a result, the six-month growth rate of the leading index has turned negative, down from an average growth rate of more than 4.0 percent in the third quarter of 2002. Despite these successive declines, the magnitude of the decrease in the leading index is neither as deep nor as widespread as in previous periods of significant weakness and it is therefore still too early to tell if the leading index is signaling a downturn in economic activity.
  • The coincident index, a measure of current economic activity, declined slightly in March. Weakness in the leading index since mid-2002 has erased any upward momentum experienced after the previous slowdown. This suggests that the coincident index and economic activity are likely to remain sluggish throughout the first half of 2003.

Leading Indicators. Three of the ten components that make up the leading index increased in March. The positive contributors to the index – in order from the largest positive contributor to the smallest – are business failures (inverted), the Tankan business conditions survey, and real money supply. Six components decreased in March. The negative contributors to the index – in order from the largest negative contributor to the smallest – are the Stock Price index, six month growth rate of labor productivity*, index of overtime worked, yield spread, new orders for machinery and construction*, and dwelling units started. Real operating profits* were unchanged.

With the decrease of 0.2 percent in March, the leading index now stands at 90.7 (1990=100). Based on revised data, this index decreased 0.4 percent in February and increased 0.1 in January. During the six-month span through March, the index decreased 0.7 percent, and six of the ten components advanced (diffusion index, six-month span equals 60.0 percent).

Coincident Indicators. Three of the six components that make up the coincident index increased in March. The positive contributors – in order from the largest positive contributor to the smallest – are number of persons employed, wage and salary income*, and real manufacturing sales*. Three components decreased in March. The negative contributors to the index– in order from the largest negative contributor to the smallest- are real wholesale sales, real retail sales, and industrial production.

With the decrease of 0.1 percent in March, the coincident index now stands at 101.7 (1990=100). Based on revised data, this index decreased 0.4 percent in February and increased 0.6 percent in January. During the six-month span through March, the index decreased 0.2 percent, and two of the six components advanced (diffusion index, six-month span equals 33.3 percent).

Data Availability. The data series used to compute the two composite indexes reported in this release are those available “as of” 5:00 P.M. ET May 8, 2003. Some series are estimated as noted below.

*Notes: The series in the leading index that are based on The Conference Board estimates are real operating profits, the six-month growth rate of labor productivity, and new orders for machinery and construction. The series in the coincident index that are based on The Conference Board estimates are real manufacturing sales and wage and salary income.

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

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