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Benchmark Revisions - September 2005

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Released: Monday, March 12, 2007

The Conference Board announced today that the leading index for Korea increased 0.7 percent, while the coincident index increased 0.4 percent in January.

  • The leading index increased in January, and December's decrease was revised up to no change, as a result of data revisions — mainly in value of machinery orders. Large increases in real exports, private construction orders, value of machinery orders, and letters of credit arrivals contributed to January's gain. The leading index grew 2.9 percent from July 2006 to January 2007 (a 5.9 percent annual rate), and it has been growing at about a 5.0 to 6.0 percent annual rate since early 2006. In addition, the strengths and weaknesses among the leading indicators have been somewhat balanced in the last several months.
  • The coincident index also increased in January, continuing to grow on an upward trend. The wholesale and retail sales component was the largest positive contributor to this month's gain. At the same time, real GDP grew at a 3.9 percent average annual rate in the second half of 2006 (including a 3.4 percent rate in the fourth quarter), slightly down 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 moderate to strong economic growth is likely to continue in the near term.

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

With the 0.7 percent increase in January, the leading index now stands at 158.6 (1990=100). Based on revised data, this index remained unchanged in December and increased 1.0 percent in November. During the six-month span through January, the leading index increased 2.9 percent, with six of the seven components advancing (diffusion index, six-month span equals 85.7 percent).

COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in January. The positive contributors to the leading index — in order from the largest positive contributor to the smallest — were the wholesale and retail sales component, total employment, and monthly cash earnings. Industrial production remained unchanged in January.

With the 0.4 percent increase in January, the coincident index now stands at 166.1 (1990=100). Based on revised data, this index decreased 0.2 percent in December and increased 0.1 percent in November. During the six-month span through January, the coincident index increased 2.0 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 March 9, 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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