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Benchmark Revisions - September 2005

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Released: Thursday, May 10, 2007

The Conference Board announced today that the leading index for Korea declined 0.7 percent, while the coincident index declined 0.7 percent in March.

  • The leading index decreased again in March, following a small decline in February. The large decline in March was mainly due to large negative contributions from letters of credit arrivals, value of machinery orders, and private construction orders which more than offset large positive contributions from the index of inventories to shipment and real exports. The six-month growth rate of the leading index in March fell to a - 0.8 percent rate (a -1.6 percent annual rate), down from a recent high of 4.4 percent rate in September 2006 (about a 9.0 percent annual rate). In addition, weaknesses among the leading indicators were widespread in March.
  • The coincident index also decreased in March, with all but total employment contributing negatively to the index. At the same time, real GDP grew at a 3.6 percent average annual rate in the first quarter of 2007, slightly down from a 4.4 percent average annual rate in the second half of 2007. Although the leading index has weakened in early 2007, the recent behavior in the leading index so far still suggests that moderate economic growth is likely to continue in the near term.

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

With the 0.7 percent decrease in March, the leading index now stands at 157 (1990=100). Based on revised data, this index declined 0.3 percent in February and increased 0.9 percent in January. During the six-month span through March, the leading index decreased 0.8 percent, with two of the seven components advancing (diffusion index, six-month span equals 28.6 percent).

COINCIDENT INDICATORS. One of the four components that make up the coincident index increased in March. The positive contributor the leading index was total employment. Monthly cash earnings, the wholesale and retail sales component, and industrial production declined.

With the 0.7 percent decrease in March, the coincident index now stands at 166.4 (1990=100). Based on revised data, this index increased 1.1 percent in February and increased 0.2 percent in January. During the six-month span through March, the coincident index increased 0.7 percent, with two of the four components advancing (diffusion index, six-month span equals 50.0 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 May 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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