Global Business Cycle Indicators
|Benchmark Revisions - November 2006|
Press Release Archive
Released: Tuesday, August 9, 2005
The Conference Board reports today that the leading index for Japan increased 0.5 percent, and the coincident index was unchanged in June.
- The leading index increased sharply in June after staying essentially flat from January to May. The pick up in the index of overtime worked in manufacturing made the largest contribution to June’s gain but the strength among the other components of the leading index has also become somewhat more widespread. Despite this month’s gain, the growth rate of the leading index continues to fluctuate around zero since the end of 2004. This is a slight improvement from the declines in the second half of 2004, but it is still well below the peak growth rate reached in the first half of 2004.
- The coincident index was unchanged in June following a small decline in May and a sharp gain in April. The coincident index has been extremely volatile in recent months, but has been on a slightly rising trend since mid-2003. At the same time, real GDP increased sharply in the first quarter of 2005 (a 4.9 percent annualized rate) following a small increase (0.3 percent) in the fourth quarter of 2004 and a small decline (-0.8 percent) in the previous two quarters. The current behavior of the leading index suggests that the economy will continue growing in the near term, but more slowly than in the first quarter.
Leading Indicators.Seven 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 index of overtime worked, real money supply, new orders for machinery and construction*, stock prices, dwelling units started, the Tankan business conditions survey, and the six month growth rate of labor productivity. The (inverted) business failures, yield spread, and real operating profits* declined in June.
With the increase of 0.5 percent in June, the leading index now stands at 98.6 (1990=100). Based on revised data, this index was unchanged in May and declined 0.2 percent in April. During the six-month span through June, the index increased 0.9 percent, and seven of the ten components advanced (diffusion index, six-month span equals 70.0 percent).
Coincident Indicators.Three of the four components that make up the coincident index increased in June. The positive contributors to the index – in order from the largest positive contributor to the smallest – include industrial production, the retail, wholesale, and manufacturing sales*, and wage and salary income*. Number of employed persons declined in June.
Holding steady in June, the coincident index now stands at 105.0 (1990=100). Based on revised data, this index declined 0.1 percent in May and increased 1.0 percent in April. During the six-month span through June, the index increased 1.2 percent, and all four components advanced (diffusion index, six-month span equals 100.0 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 August 8, 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.
Notes: Starting with the July 2005 press release, The Conference Board uses Real Retail, Wholesale, and Manufacturing Sales as a component of the coincident index. This will replace the individual sales series previously used. Before the aggregation is done, the individual sales series will be deflated to adjust for changes in the price levels. Real wholesale sales and real manufacturing sales are deflated with the wholesale price for manufacturing goods. (As part of this revision an error in the price index that was used to deflate manufacturing sales was also corrected.) Real retail sales are deflated with the consumer price index. The resulting three deflated series are added together to provide new real retail, wholesale, and manufacturing sales data. The Coincident Index is now more consistent with other measures of economic activity, such as industrial production and GDP (particularly after 2001).
THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.