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Benchmark Revisions - September 2005

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Released: Tuesday, November 14, 2006

The Conference Board announced today that the leading index for Korea increased 1.3 percent, and the coincident index increased 0.5 percent in September.

  • The leading index increased sharply again in September. With this month's increase, the leading index has increased in five of the last six months, and it has grown 4.6 percent from March to September (9.3 percent annual rate). In addition, the strengths among the leading indicators have continued to be widespread. The last time the leading index grew substantially above an 8.0 percent annual rate was during the second half of 2003.
  • The coincident index also increased in September. Despite some volatility in early 2006, this index of current economic activity continues to grow on an upward trend. In September, industrial production and wholesale and retail sales were again the main positive contributors, and the strengths among the coincident indicators have been widespread.
  • After staying essentially flat in the second half of 2005, the leading index picked up sharply since the end of the year. At the same time, real GDP growth slowed to a 4.1 percent average annual rate in the first half of 2006, down from the 6.7 percent average rate in the second half of 2005. Despite short-term volatility, the widespread strength in the leading index in recent months suggests that economic growth should continue at a moderate to strong rate in the near term.

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

With the 1.3 percent increase in September, the leading index now stands at 158.5 (1990=100). Based on revised data, this index increased 1.4 percent in August and declined 0.2 percent in July. During the six-month span through September, the leading index increased 4.6 percent, with all seven components advancing (diffusion index, six-month span equals 100.0 percent).

COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in September. 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 monthly cash earnings. Total employment declined in September.

With the 0.5 percent increase in September, the coincident index now stands at 165.7 (1990=100). Based on revised data, this index increased 1.2 percent in August and decreased 0.7 percent in July. During the six-month span through September, the coincident index increased 2.5 percent, with all four components advancing (diffusion index, six-month span equals 100.0 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 November 13, 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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