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Benchmark Revisions - September 2005

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Released: Wednesday, October 11, 2006

The Conference Board announced today that the leading index for Korea increased 0.9 percent and the coincident index increased 1.1 percent in August.

  • The leading index increased sharply in August after a slight decline in July. With this month's gain, the leading index continued to grow at about a 5.0 percent annual rate in recent months, still below the 6.0 to 8.0 percent growth through the beginning of 2006. In addition, the strength in the leading index has become somewhat more widespread in the last four to five months.
  • The coincident index also increased in August. Industrial production and wholesale and retail sales were the main contributors to this month's gain. At the same time, real GDP growth slowed to a 4.1 percent average annual rate in the first half of 2006 (including a 3.4 percent rate in the second quarter), down from the 6.7 percent average rate in the second half of 2005. The recent behavior in the leading index suggests that moderate economic growth should continue in the near term.

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

With the 0.9 percent increase in August, the leading index now stands at 155.9 (1990=100). Based on revised data, this index declined 0.1 percent in July and increased 0.9 percent in June. During the six-month span through August, the leading index increased 2.0 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 August. The positive contributors to the leading index — in order from the largest positive contributor to the smallest — were the wholesale and retail sales component, industrial production, and total employment. Monthly cash earnings remained unchanged in August.

With the 1.1 percent increase in August, the coincident index now stands at 164.6 (1990=100). Based on revised data, this index decreased 0.7 percent in July and increased 0.2 percent in June. During the six-month span through August, the coincident index increased 1.5 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 October 10, 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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