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Benchmark Revisions - November 2006

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Released: Tuesday, February 8, 2005

The Conference Board reports today that the leading index for Japan increased 0.1 percent, and the coincident index was unchanged in December.

  • The leading index increased slightly in December, but November’s no change was revised down to a small decline as actual data for business failures became available. December' s increase keeps the leading index on a flat to slightly rising trend since the middle of 2004, down from a 5.0 percent growth in the first half of the year. The growth rate of the leading index in the second half of 2004 is only slightly below its long-term trend growth rate.
  • Real GDP increased at a 0.3 percent annual rate in the fourth quarter of 2004 following a slight decline in the third quarter, both of these 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 the recent sluggish rate, but more slowly than the strong growth of late 2003 and early 2004.

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

With the 0.1 percent increase in December, the leading index now stands at 99.1 (1990=100). Based on revised data, this index decreased 0.1 percent in November and increased 0.2 percent in October. During the six-month span through December, the index declined 0.2 percent, and five of ten components advanced (diffusion index, six-month span equals 50.0 percent).

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

Holding steady in December, the coincident index now stands at 100.3 (1990=100). Based on revised data, this index decreased 0.4 percent in November and was unchanged in October. During the six-month span through December, the index decreased 0.4 percent, and two of the six components advanced (diffusion index, six-month span equals 25.0 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 February 7, 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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