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Benchmark Revisions - November 2006

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Released: Thursday, May 6, 2004

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

  • The leading index increased slightly in March following no change in February. As a result, the growth rate of the leading index has slowed to about a 3.0 percent annual rate over the last three months, down from about a 10.0 percent growth rate from April 2003 to December 2003. The strength in the leading index has also been somewhat less widespread in recent months.
  • The coincident index declined for the second consecutive month in March, and February’s decline was revised downward because of data revisions. As a result, the coincident index is up only 1.4 percent (annual rate) from its most recent low in August 2003.
  • Real GDP increased at a 4.5 percent annual rate in the second half of 2003, consistent with the very strong growth rate of the leading index. However, the very rapid growth of the leading index in 2003 has not continued so far in 2004. Although exactly how much the growth rate of the leading index has slowed is still uncertain, its moderation suggests some slowing in the rate of economic growth later this year.

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

With an increase of 0.2 percent in March, the leading index now stands at 97.3 (1990=100). Based on revised data, this index remained unchanged in February and increased 0.5 percent in January. During the six-month span through March, the index increased 3.4 percent, and nine of ten components advanced (diffusion index, six-month span equals 95.0 percent).

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

With a 0.2 percent decrease in March, the coincident index now stands at 102.1 (1990=100). Based on revised data, this index decreased 0.8 percent in February and increased 0.5 percent in January. During the six-month span through March, the index decreased 0.1 percent, and three of the six 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 May 4, 2004. 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, six month growth rate of labor productivity, and new orders for machinery. 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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