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Benchmark Revisions - September 2005

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Released: Tuesday, December 11, 2007

The Conference Board announced today that the leading index for Korea increased 2.3 percent and the coincident index increased 0.5 percent in October.

  • The leading index increased sharply in October following a large gain in September, and all components contributed positively except the government bond yield (inverted). Value of machinery orders, private construction orders, and stock prices continued to make large positive contributions to the leading index this month. Based on revised data, there was an upward revision to the leading index in September, which offset a downward revision in August. With October's increase, the six-month growth rate of the leading index continued to pick up, and the index grew 5.1 percent (a 10.5 percent annual rate) from April to October, well above the six-month growth rate of -0.3 percent (a -0.6 percent annual rate) in March. From April to October, the strengths among the leading indicators were more widespread than the weaknesses, after remaining roughly balanced through September.
  • The coincident index also increased in October, and its six-month growth rate has also picked up slightly in recent months. In addition, the strengths among the coincident indicators have been very widespread. At the same time, real GDP grew at a 5.4 percent annualized rate in the third quarter of 2007, slightly above the 5.5 percent average rate in the first half of 2007 and above the 4.4 percent average rate in the second half of 2006. The behavior in both the leading and coincident indexes in recent months suggests that the economic growth is likely to continue at a moderate to strong pace in the near term.

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

With the 2.3 percent increase in October, the leading index now stands at 180.6 (1990=100). Based on revised data, this index increased 0.9 percent in September and remained unchanged in August. During the six-month span through October, the leading index increased 5.1 percent, with six of the seven components advancing (diffusion index, six-month span equals 85.7 percent).

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

With the 0.5 percent increase in October, the coincident index now stands at 170.8 (1990=100). Based on revised data, this index decreased 0.1 percent in September and increased 0.5 percent in August. During the six-month span through October, the coincident index increased 2.2 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 December 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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