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Benchmark Revisions - November 2006

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Released: Tuesday, January 11, 2011

This month's release incorporates annual benchmark revisions to the composite economic indexes, which bring them up-to-date with revisions in the source data. These revisions do not change the cyclical properties of the indexes. The indexes are updated throughout the year, but only for the previous six months. Data revisions that fall outside of the moving six-month window are not incorporated until the benchmark revision is made and the entire histories of the indexes are recomputed. As a result, the revised indexes, in levels and month-on-month changes, will not be directly comparable to those issued prior to the benchmark revision.  

For further details see data availability and notes section below and for more information, please visit our website at http://www.conference-board.org/economics/bci/ or contact us at indicators@conference-board.org.

The Conference Board Leading Economic Index®  (LEI) for Japan decreased 0.6 percent and The Conference Board Coincident Economic Index®  (CEI) decreased 0.2 percent in November.

  • The Conference Board LEI for Japan fell sharply again in November, the fifth decrease in the last six months. Large declines in the six-month growth rate of labor productivity, new orders for machinery and construction, and real operating profits contributed to this decline. As a result, the six-month change in the leading economic index has continued to fall – to -4.1 percent (a -8.0 percent annual rate) from May to November 2010, down sharply from the increase of 6.3 percent (about a 13.0 percent annual rate) in the previous six months. In addition, the weaknesses among the leading indicators continued to be more widespread than the strengths in recent months. 
  • The Conference Board CEI for Japan, a measure of current economic activity, also declined in November. The employment and income components continued to decrease this month. With the decline in November, the six-month change in the coincident economic index continued to fall – to -1.9 percent (a -3.8 percent annual rate) for the period through November 2010, down from the increase of 2.5 percent (about a 5.0 percent annual rate) for the previous six months. Meanwhile, real GDP growth was revised up from 3.9 percent to 4.5 percent (annual rate) in the third quarter of 2010, following an increase of 3.0 percent annual rate in the second quarter. 
  • The Conference Board LEI for Japan continued to fall in November and the weaknesses among the leading indicators have been widespread.  As a result, its six-month growth rate remains negative.  At the same time, The Conference Board CEI for Japan has been decreasing with widespread weaknesses among its components. Taken together, the behavior of the composite indexes continues to suggest that economic activity may weaken further in the coming months.

LEADING INDICATORS.  Four of the ten components that make up The Conference Board LEI for Japan increased in November.  The positive contributors to the index – in order from the largest positive contributor to the smallest – include stock prices, the (inverted) business failures, the interest rate spread, and dwelling units started.  The negative contributors – in order from the largest negative contributor to the smallest – include the six-month growth rate of labor productivity, the new orders for machinery and construction component*, real operating profits*, the Tankan business conditions survey, real money supply, and the index of overtime worked.   

With the decrease of 0.6 percent in November, The Conference Board LEI for Japan now stands at 93.7 (2004=100).  Based on revised data, this index decreased 1.4 percent in October and decreased 0.6 percent in September.  During the six-month span through November, the index decreased 4.1 percent, and four of the ten components advanced (diffusion index, six-month span equals 40.0 percent).

COINCIDENT INDICATORS. Two of the four components that make up The Conference Board CEI for Japan decreased in November. The positive contributors to the index – in order from the larger positive contributor to the smaller – include industrial production and the retail, wholesale, and manufacturing sales* component.  Number of employed persons and wage and salary income declined in November.

With the decrease of 0.2 percent in November, The Conference Board CEI for Japan now stands at 97.2 (2004=100).  Based on revised data, this index decreased 0.9 percent in October and decreased 0.2 percent in September.  During the six-month span through November, the index decreased 1.9 percent, and only one of the four components advanced (diffusion index, six-month span equals 25.0 percent).

DATA AVAILABILITY AND NOTES. The data series used to compute The Conference Board Leading Economic Index®  (LEI) for Japan and The Conference Board Coincident Economic Index® (CEI) for Japan reported in this release are those available “as of” 5:00 P.M. ET January 7, 2011.  Some series are estimated as noted below.

* The series in The Conference Board LEI that are based on our estimates are real operating profits and new orders for machinery.  The series in The Conference Board CEI that is based on our estimates is real manufacturing sales.

One of the LEI components, dwelling units started, is now seasonally adjusted by The Conference Board.

THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.

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