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Benchmark Revisions - September 2005

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Released: Tuesday, June 12, 2007

The Conference Board announced today that the leading index for Korea declined 0.1 percent, while the coincident index increased 1.2 percent in April.

  • The leading index decreased slightly in April, the third consecutive decline. Large negative contributions from letters of credit arrivals and value of machinery orders more than offset positive contributions from the stock price index and inverted index of inventories to shipments. The six-month growth rate of the leading index in April rose to a 0.6 percent rate (a 1.3 percent annual rate), from a -0.7 percent rate in the previous month, but this is still down from a recent high of 4.4 percent rate in September 2006 (about a 9.0 percent annual rate). In addition, strengths and weaknesses among the leading indicators have become roughly balanced in April.
  • The coincident index rose sharply in April, with all components contributing positively 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. The leading index weakened in early 2007, and it is essentially at the same level as in December 2006. However, despite this moderation in its growth rate, recent behavior of the leading index so far still suggests that slow to moderate 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 April. The positive contributors — from the largest positive contributor to the smallest — were stock prices, the (inverted) index of inventories to shipments, real exports FOB, and private construction orders. Negative contributors — from the largest negative contributor to the smallest — were letter of credit arrivals and value of machinery orders, and the (inverted) yield of government public bonds.

With the 0.1 percent decrease in April, the leading index now stands at 157.0 (1990=100). Based on revised data, this index declined 0.7 percent in March and declined 0.2 percent in February. During the six-month span through April, the leading index increased 0.6 percent, with three of the seven components advancing (diffusion index, six-month span equals 42.9 percent).

COINCIDENT INDICATORS. All four components that make up the coincident index increased in April. The positive contributors to the leading index — in order from the largest positive contributor to the smallest — were monthly cash earnings*, industrial production, the wholesale and retail sales component, and total employment.

With the 1.2 percent increase in April, the coincident index now stands at 167.6 (1990=100). Based on revised data, this index decreased 1.3 percent in March and increased 1.2 percent in February. During the six-month span through April, 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 June 8, 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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