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Benchmark Revisions - November 2006

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Released: Thursday, January 6, 2005

The Conference Board reports today that the leading index for Japan was unchanged, while the coincident index decreased 0.3 percent in November.

  • The leading index was unchanged in November, and October’s decline was revised to a small increase as actual data for several components became available. The net result is that the growth rate of the leading index has slowed since the middle of 2004 to the 0 to 1.0 percent range, down from about 5.0 percent growth in the first half of the year. This recent growth in the leading index is only slightly below its long-term trend growth rate.
  • At the same time, real GDP growth increased at a 0.3 percent annual rate in the third quarter of 2004, and the second quarter was revised down to a 0.6 percent decline. These are significantly below the 4.0 percent average growth rate over the previous four quarters. The current behavior of the leading index suggests that the economy will continue to grow in the near term, probably more rapidly than in the third quarter, but more slowly than the strong growth of late 2003 and early 2004.

Leading Indicators.Four of the ten components that make up the leading index increased in November. The positive contributors to the index – in order from the largest positive contributor to the smallest – include the (inverted) business failures, the Tankan business conditions survey, new orders for machinery and construction*, and real operating profits*. Four of the ten components that make up the leading index declined in November. 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, dwelling units started, stock prices, and yield spread. The index of overtime worked and real money supply held steady in November.

Holding steady in November, the leading index now stands at 99.0 (1990=100). Based on revised data, this index increased 0.1 percent in October and decreased 0.3 percent in September. During the six-month span through November, the index increased 0.9 percent, and five of ten components advanced (diffusion index, six-month span equals 55.0 percent).

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

With the decrease of 0.3 percent in November, the coincident index now stands at 100.3 (1990=100). Based on revised data, this index decreased 0.1 percent in October and decreased 0.2 percent in September. During the six-month span through November, the index decreased 0.2 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 January 5, 2005. 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 and six month growth rate of labor productivity. 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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