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Benchmark Revisions - September 2005

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Released: Tuesday, June 13, 2006

The Conference Board announced today that the leading index for Korea increased 0.4 percent, while the coincident index increased 0.2 percent in April.

  • The leading index increased in April, following a sharp decline in the previous month. The growth rate of the leading index picked up gradually since the second half of 2005 and it has been fluctuating around 7.0 percent annual rate in recent months. However, the strengths and weaknesses among the leading indicators have been somewhat balanced in the October to April period, with positive contributions from the stock prices and real exports offset by negative contributions from private construction orders and index of inventories to shipments in manufacturing.
  • The coincident index increased slightly in April, continuing its slightly rising trend. At the same time, real GDP grew at a 5.1 percent annual rate in the first quarter of 2006, down from the 6.7 percent average rate in the second half of 2005, but up from the 4.0 percent average rate in the first half of 2005. The behavior in the leading index in recent months still suggests moderate to strong economic growth should continue in the near term.

LEADING INDICATORS. Three of the seven components that make up the leading index increased in April. The positive contributors - from the largest positive contributor to the smallest - were stock prices, letter of credit arrivals, and real exports FOB. Private construction orders, the (inverted) index of inventories to shipments, value of machinery orders, and the (inverted) yield of government public bonds declined.

With the 0.4 percent increase in April, the leading index now stands at 152.3 (1990=100). Based on revised data, this index declined 0.8 percent in March and increased 1.5 percent in February. During the six-month span through April, the leading index increased 3.4 percent, with four of the seven components advancing (diffusion index, six-month span equals 64.3 percent).

COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in April. The positive contributors to the leading index - in order from the largest positive contributor to the smallest - were total employment, the wholesale and retail sales component, and monthly cash earnings. Industrial production remained unchanged in April.

With the 0.2 percent increase in April, the coincident index now stands at 163.1 (1990=100). Based on revised data, this index increased 0.4 percent in March and decreased 0.4 percent in February. During the six-month span through April, the coincident index increased 2.0 percent, with all four components advancing (diffusion index, six-month span equals 100.0 percent).

DATA AVAILABILITY AND NOTES. The data series used to compute the two composite indexes reported in this release are those available "as of" 10 A.M. (ET) on June 12, 2006.

* The series in the coincident index based on The Conference Board's estimates is monthly cash earnings. There is no forecasted series in the leading index.

Effective with the June 13, 2006 release, a programming error in the calculation of the diffusion indexes for leading indicators was corrected. The composite indexes were not affected by this error.

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

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