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Benchmark Revisions - September 2005

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Released: Thursday, January 10, 2008

The Conference Board announced today that the leading index for Korea increased 0.5 percent, while the coincident index declined 0.2 percent in November.

  • The leading index increased again in November, the sixth monthly increase in the last eight months. Letter of credit arrivals in manufacturing and private construction orders made very large positive contributions to the index in November and more than offset large losses in value of machinery orders and the stock price index. With November's increase, the leading index grew by 4.7 percent (a 9.6 percent annual rate) from May to November, well above the six-month growth rate of -0.3 percent (a -0.6 percent annual rate) between September 2006 and March 2007. In addition, the six-month diffusion index indicates that the strengths among the leading indicators have been more widespread than the weaknesses in recent months.
  • The coincident index declined in November, the first decline in the last eight months. November's decrease in the index was mainly due to falling industrial production and wholesale and retail sales in November, offsetting gains in employment and monthly cash earnings*. But the six-month diffusion index indicates that the strengths among the coincident indicators remain widespread. At the same time, real GDP grew at a 5.4 percent annualized rate in the third quarter of 2007, slightly below 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 still suggests that economic growth should continue at a moderate to strong pace in the near term.

LEADING INDICATORS. Three 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 letter of credit arrivals, private construction orders, and real exports FOB. Negative contributors — from the largest negative contributor to the smallest - were value of machinery orders, stock prices, the (inverted) yield of government public bonds, and the (inverted) index of inventories to shipments.

With the 0.5 percent increase in November, the leading index now stands at 181.3 (1990=100). Based on revised data, this index increased 2.2 percent in October and increased 0.9 percent in September. During the six-month span through November, the leading index increased 4.7 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 monthly cash earnings and total employment. The wholesale and retail sales component and industrial production declined in November.

With the 0.2 percent decrease in November, the coincident index now stands at 170.4 (1990=100). Based on revised data, this index increased 0.5 percent in October and remained unchanged in September. During the six-month span through November, the coincident index increased 1.5 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 January 10, 2008.

* The series in the coincident index based on The Conference Board's estimates is monthly cash earnings. The series in the leading index based on The Conference Board's estimates are value of machinery orders, letter of credit arrivals, and index of inventories to shipments.

THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.

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StraightTalk®

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