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Benchmark Revisions - September 2005

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Released: Thursday, May 8, 2008

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

  • The leading index declined again in March following a sharp drop in February. The weaknesses among the leading indicators continued to be widespread this month, with five of the seven components in the leading index making negative contributions. Among them, the private construction orders component made the largest negative contribution. With March's decrease, the six-month change in the leading index has dropped down to a -0.3 percent rate (a -0.6 percent annual rate) between September 2007 to March 2008, well below the rapid growth rate of 5.1 percent (about a 10.5 percent annual rate) reached between April to October 2007.
  • The coincident index increased slightly again in March, and the strengths among the coincident indicators have been widespread in recent months. Despite this gain, the six-month growth rate for this index of current economic activities continued to slow, to 1.0 percent (a 2.0 percent annual rate) from September 2007 to March 2008, down from the most recent peak growth of 2.6 percent (about a 5.3 percent annual rate) in July 2007.
  • The leading index has been on a downward trend since its most recent peak in October 2007, as a result of widespread weakness among its components. At the same time, real GDP grew at a 2.9 percent annual rate in the first quarter of 2008, well below the 6.2 percent average annual rate in the second half of 2007. The recent behavior of both the leading and coincident indexes so far suggests that slow to more moderate economic growth is likely to continue in the near term.

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

With the 0.2 percent decrease in March, the leading index now stands at 176.2 (1990=100). Based on revised data, this index declined 1.3 percent in February and increased 0.5 percent in January. During the six-month span through March, the leading index decreased 0.3 percent, with three of the seven components advancing (diffusion index, six-month span equals 42.9 percent).

COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in March. 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, and monthly cash earnings. Total employment declined in March.

With the 0.2 percent increase in March, the coincident index now stands at 171.4 (1990=100). Based on revised data, this index increased 0.2 percent in February and increased 0.1 percent in January. During the six-month span through March, the coincident index increased 1.0 percent, with three of the four components advancing (diffusion index, six-month span equals 87.5 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 8, 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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