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Benchmark Revisions - September 2005

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Released: Monday, March 10, 2008

The Conference Board announced today that the leading index for Korea declined 0.7 percent and the coincident index declined 0.2 percent in January.

  • The leading index declined again in January following a large decline in December, and the weaknesses among the leading indicators have also become more widespread in recent months. Stock prices and private construction orders contributed largely to the decline in the leading index in January, more than offsetting large positive contributions from value of machinery orders and the (inverted) bond yields. With this month's decrease, the growth rate of the leading index has slowed, to a 1.3 percent (a 2.5 percent annual rate) between July 2007 to January 2008, after picking up to the 5.1 percent rate (about a 10.5 percent annual rate) reached between April to October.
  • The coincident index also declined in January, but there was a large upward revision to the level of the coincident index in December as data for monthly cash earnings became available. Despite the widespread strength in the coincident index, the six-month growth rate for the index declined to 1.2 percent (a 2.4 percent annual rate) from July 2007 to January 2008, down from 2.6 percent (about a 5.3 percent annual rate) from January to July 2007.
  • The leading index fell for three consecutive months as a result of widespread weakness among its components, after growing rapidly between April and October 2007. Moreover, the growth of the coincident index also moderated somewhat in recent months. At the same time, real GDP grew at about a 5.8 percent average annual rate during the third and fourth quarters of 2007, (including a 6.3 percent annual rate during the fourth quarter) slightly above the 5.5 percent average annual rate during the first half of 2007. The recent behavior of both the leading and coincident indexes so far still suggests that more moderate economic growth should continue in the near term.

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

With the 0.7 percent decrease in January, the leading index now stands at 177.1 (1990=100). Based on revised data, this index declined 0.9 percent in December and declined 0.2 percent in November. During the six-month span through January, the leading index increased 1.3 percent, with four of the seven components advancing (diffusion index, six-month span equals 57.1 percent).

COINCIDENT INDICATORS. Two of the four components that make up the coincident index increased in January. The positive contributors to the leading index — in order from the larger positive contributor to the smaller — were the wholesale and retail sales component and industrial production. Monthly cash earnings declined, while total employment remained unchanged in January.

With the 0.2 percent decrease in January, the coincident index now stands at 171.1 (1990=100). Based on revised data, this index increased 0.7 percent in December and decreased 0.4 percent in November. During the six-month span through January, the coincident index increased 1.2 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 March 10, 2008.

* 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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