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Benchmark Revisions - September 2005

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Released: Tuesday, December 12, 2006

The Conference Board announced today that the leading index for Korea declined 1.5 percent and the coincident index declined 0.7 percent in October.

  • The leading index fell sharply in October, following two large increases. Despite this month's decline, the growth rate of the leading index has continued to fluctuate around a 6.0 percent average annual rate, up from the 3.0 to 4.0 percent rate through the end of 2005. In addition, the strengths among the leading indicators have been more widespread than weaknesses in recent months.
  • The coincident index also fell sharply in October, with wholesale and retail sales making the largest contribution to the decline. At the same time, real GDP grew at a 4.4 percent annual rate in the third quarter of 2006, slightly up from the 4.1 percent average annual rate in the first half of the year, but still down from the 6.7 percent average rate in the second half of 2005. Despite short-term volatility, the behavior in the leading index in recent months still suggests that economic growth should continue at a moderate to strong rate in the near term.

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

With the 1.5 percent decrease in October, the leading index now stands at 156.0 (1990=100). Based on revised data, this index increased 1.4 percent in September and increased 1.3 percent in August. During the six-month span through October, the leading index increased 2.4 percent, with five of the seven components advancing (diffusion index, six-month span equals 71.4 percent).

COINCIDENT INDICATORS. Two of the four components that make up the coincident index increased in October. The positive contributors to the leading index — in order from the larger positive contributor to the smaller — were industrial production and total employment. The wholesale and retail sales component and monthly cash earnings declined in October.

With the 0.7 percent decrease in October, the coincident index now stands at 164.5 (1990=100). Based on revised data, this index increased 0.7 percent in September and increased 1.1 percent in August. During the six-month span through October, the coincident index increased 1.1 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 December 11, 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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