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Benchmark Revisions - November 2006

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Released: Thursday, August 5, 2004

The Conference Board reports today that the leading index for Japan increased 1.0 percent and the coincident index held steady in June.

  • The leading index increased sharply in June, and May's previously reported small decline was revised up to a moderate increase as actual data for manufacturing productivity and housing starts became available. In addition, the strength in the leading index continues to be widespread.
  • There was an unusual fluctuation in manufacturing productivity in the first half of 2004, without which the leading would have been on a steadier upward trend. Nonetheless, the growth rate of the leading index has slowed to about a 3.5 percent annual rate so far this year, down from the peak growth rate reached late last year.
  • Real GDP growth picked up to a 6.7 percent average rate over the last two quarters for which data are available (the fourth quarter of 2003 and the first quarter of 2004), and to a 5.0 percent rate over the past year. The leading index is signaling a continuation of economic growth, but at a slower rate than in the latest reported quarters.

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

With the increase of 1.0 percent in June, the leading index now stands at 98.2 (1990=100). Based on revised data, this index increased 0.5 percent in May and increased 0.4 percent in April. During the six-month span through June, the index increased 1.7 percent, and seven of ten components advanced (diffusion index, six-month span equals 70.0 percent).

Coincident Indicators.Two of the six components that make up the coincident index increased in June. The positive contributors to the index – in order from the larger positive contributor to the smaller – include real wholesale sales and wage and salary income*. Number of employed persons, industrial production, real retail sales, and real manufacturing sales* decreased in June.

Holding steady in June, the coincident index now stands at 101.3 (1990=100). Based on revised data, this index decreased 0.4 percent in May and increased 0.6 percent in April. During the six-month span through June, the index decreased 1.0 percent, and two of the six components advanced (diffusion index, six-month span equals 41.7 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 August 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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