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Benchmark Revisions - November 2006

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Released: Thursday, July 10, 2003

The Conference Board reports today that the leading index for Japan increased 0.6 percent and the coincident index increased 0.4 percent in May.

  • May's increase in the leading index is the first significant increase since last October. The leading index had declined from November to April, but much less severely than during previous economic downturns, including 1991. The coincident index, a measure of current economic activity, also increased in May after three consecutive declines.
  • The increase in the leading index is potentially a positive development for near term growth prospects, but the six-month growth rate remains negative. In addition, the six-month diffusion index is still weak, staying below 50.0 percent for the second consecutive month.
  •  The decline in the leading index since November has been reflected in economic weakness early this year. The most recent movement in the leading index is consistent with continued sluggish economic growth, but perhaps not as weak as in the first quarter.

Leading Indicators. Five of the ten components that make up the leading index increased in May. The positive contributors to the index – in order from the largest positive contributor to the smallest – include the index of overtime worked, business failures, stock price index, real money supply, and new orders for machinery and construction*. Four components decreased in May. The negative contributors to the index – in order from the largest negative contributor to the smallest – include the six month growth rate of labor productivity*, yield spread, real operating profits*, and dwelling units started*. The Tankan business conditions survey was unchanged.

With an increase of 0.6 percent in May, the leading index now stands at 90.9 (1990=100). Based on revised data, this index decreased 0.3 percent in April and decreased 0.2 percent in March. During the six-month span through May, the index decreased 0.9 percent, and four of the ten components advanced (diffusion index, six-month span equals 40.0 percent).

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

With an increase of 0.4 percent in May, the coincident index now stands at 101.6 (1990=100). Based on revised data, this index decreased 0.4 percent in April and decreased 0.1 percent in March. During the six-month span through May, the index decreased 0.4 percent, and three of the components advanced (diffusion index, six-month span equals 50.0 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 July 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, dwelling units started, 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.

Global Indicators

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