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Benchmark Revisions - September 2005

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Released: Wednesday, July 12, 2006

The Conference Board announced today that the leading index for Korea increased 0.5 percent, while the coincident index increased 0.2 percent in May.

  • The leading index increased again in May, following a sharp drop in March. Letter of credit arrivals and real exports FOB continued to be the major contributors to the gain in the leading index, more than offsetting the weakness in the value of machinery orders and stock prices in May. The growth of the leading index has picked up in the second half of 2005 and is now fluctuating around a 6.0 percent annual rate in recent months, but this is down from over 8.0 percent growth in early 2005. The strengths and weaknesses among the leading indicators have also been somewhat balanced in recent months.
  • The coincident index increased slightly in May. It continues to rise on a slight upward trend, but its growth has moderated somewhat in recent months. At the same time, real GDP grew at a 4.9 percent annual rate in the first quarter of 2006, down from the 6.7 percent average rate in the second half of 2005. The behavior in the leading index in recent months still suggests that moderate to strong economic growth should continue in the near term.

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

With the 0.5 percent increase in May, the leading index now stands at 153.0 (1990=100). Based on revised data, this index increased 0.4 percent in April and declined 0.9 percent in March. During the six-month span through May, the leading index increased 3.0 percent, with five of the seven components advancing (diffusion index, six-month span equals 71.4 percent).

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

With the 0.2 percent increase in May, the coincident index now stands at 162.9 (1990=100). Based on revised data, this index increased 0.6 percent in April and decreased 0.4 percent in March. During the six-month span through May, the coincident index increased 0.6 percent, with three of the four components advancing (diffusion index, six-month span equals 75.0 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 July 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.

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

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