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Benchmark Revisions - September 2005

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Released: Thursday, August 14, 2003

The Conference Board announced today that the leading index for Korea increased 1.7 percent and the coincident index decreased 0.1 percent in June.

  • The leading index increased sharply in June after rising slightly from March through May. This increase in the index is primarily due to housing, stock prices, and inventories to shipments ratio. The strength in the leading indicators has also become more widespread as shown by the diffusion index.
  • The coincident index, a measure of current economic conditions, declined again in June. This is the fifth consecutive decline this year and the weakness has become more widespread. This decline in the coincident index was signaled by the sluggish performance of the leading index earlier this year and is consistent with the slower rate of GDP growth.
  • Similar to what is occurring in other countries, the leading index has turned up in recent months. While it is too soon to conclude that this is a definitive signal of sustained economic growth, the recent strength in the leading index is consistent with a pick up in economic growth in the near term.

Leading Indicators. Six of the eight components that make up the leading index increased in June. The positive contributors - from the largest positive contributor to the smallest – were authorized building permits, stock prices, the inverted index of inventories to shipments for manufacturing, monthly hours worked, real exports*, and the inverted yield of government public bonds. The negative contributors – from the larger negative contributor to the smaller – were value of machinery orders in manufacturing and letter of credit arrivals in manufacturing*.

The leading index now stands at 118.3 (1990=100). Based on revised data, this index held steady in May and increased 0.3 percent in April. During the six-month span through June, the index increased 1.4 percent, with four of its eight components advancing (diffusion index, six-month span equals 50 percent).

Coincident Indicators. Two of the four components that make up the coincident index decreased in June. The negative contributors to the index - from the larger negative contributor to the smaller – were the inverted unemployment rate and total employment. The positive contributors to the index - from the larger positive contributor to the smaller – were industrial production and wholesale and retail sales.

With the decrease of 0.1 percent in June, the coincident index now stands at 110.9 (1990=100). This index decreased 0.2 percent in May and decreased 0.3 percent in April. During the six-month span through June, the coincident index declined 0.8 percent, with only one of its components advancing (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” 10 A.M. (ET) on August 13, 2003.

*Notes: The series in the leading index based on The Conference Board’s estimates are real exports and letter of credit arrivals in manufacturing.

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

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