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Benchmark Revisions - September 2005

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Released: Thursday, January 11, 2007

The Conference Board announced today that the leading index for Korea increased 0.1 percent and the coincident index increased 0.5 percent in November.

  • The leading index increased slightly in November following a sharp decline in October. With this month's small gain, the growth rate of the leading index has slowed to a 1.8 percent rate from April to November (about a 3.7 percent annual rate). Throughout most of 2006, the growth rate of the leading index has been fluctuating around a 6.0 percent average annual rate, up from the 5.0 to 5.5 percent average annual rate in 2005. In addition, the strengths among the leading indicators have continued to be more widespread than weaknesses in recent months.
  • The coincident index also increased in November, offsetting its decline in October. The wholesale and retail sales component made the largest positive contribution to this month's gain. 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. Despite short-term volatility, the recent behavior in the leading index suggests that the economy is likely to continue growing at a moderate to strong pace in the near term.

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

With the 0.1 percent increase in November, the leading index now stands at 156.0 (1990=100). Based on revised data, this index declined 1.6 percent in October and increased 1.5 percent in September. During the six-month span through November, the leading index increased 1.8 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 November. The positive contributors to the leading index — in order from the larger positive contributor to the smaller — were the wholesale and retail sales component and total employment. Industrial production and monthly cash earnings declined in November.

With the 0.5 percent increase in November, the coincident index now stands at 165.1 (1990=100). Based on revised data, this index decreased 0.5 percent in October and increased 0.3 percent in September. During the six-month span through November, the coincident index increased 0.9 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 January 10, 2007.

* 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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