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Released: Wednesday, October 12, 2011

The Conference Board Leading Economic Index® (LEI) for Korea increased 0.3 percent and The Conference Board Coincident Economic Index® (CEI) for Korea also increased 0.3 percent in August.

 

  • The Conference Board LEI for Korea increased in August following two consecutive declines. Stock prices fell sharply in August, but its large negative contribution to the index was more than offset by positive contributions from the rest of the leading indicators. Despite this month’s gain, the six-month change in the leading economic index continued to slow — down to 0.5 percent (about a 1.0 percent annual rate) during the period through August 2011, significantly down from 5.8 percent (about a 12.0 percent annual rate) for the previous six months. Moreover, the strengths and weaknesses among the leading indicators have become roughly balanced over the last six month period.
  • The Conference Board CEI for Korea, a measure of current economic activity, also increased in August.  Total employment made the largest positive contribution to the index this month. Following this small gain, the six-month increase in the coincident economic index stands at 1.2 percent (about a 2.5 percent annual rate) between February and August this year, about the same rate as the previous six months.  At the same time, real GDP grew at a 3.6 percent annual rate in the second quarter of 2011, slower than the 5.4 percent annual rate in the first quarter of the year.  
  • The Conference Board LEI for Korea picked up in August, but its six-month growth rate has slowed from the beginning of this year. Meanwhile, The Conference Board CEI for Korea continued to increase through August, and its growth rate has been fairly stable since the third quarter of last year. Taken together, the current behavior of the composite indexes and their components suggest that economic expansion should continue in the coming months.

LEADING INDICATORS.  Six of the seven components that make up The Conference Board LEI for Korea increased in August. The positive contributors – from the largest positive contributor to the smallest – were private construction orders, letter of credit arrivals, the (inverted) yield of government public bonds, real exports FOB, value of machinery orders, and the (inverted) index of inventories to shipments.  Stock prices was the only negative contributor.   

With the 0.3 percent increase in August, The Conference Board LEI for Korea now stands at 122.3 (2004=100).  Based on revised data, this index declined 0.1 percent in July and declined 0.5 percent in June.  During the six-month span through August, the leading economic index increased 0.5 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 Conference Board CEI for Korea increased in August.  The positive contributors– in order from the largest positive contributor to the smallest – were total employment, the wholesale and retail sales component, and monthly cash earnings*. Industrial production remained unchanged in August.

With the 0.3 percent increase in August, The Conference Board CEI for Korea now stands at 116.1 (2004=100).  Based on revised data, this index increased 0.1 percent in July and increased 0.2 percent in June. During the six-month span through August, the coincident economic index increased 1.2 percent, with two of the four components advancing (diffusion index, six-month span equals 50.0 percent).

DATA AVAILABILITY.  The data series used to compute The Conference Board Leading Economic Index® (LEI) and The Conference Board Coincident Economic Index® (CEI) for Korea reported in this release are those available “as of” 10 A.M. (ET) on October 11, 2011.  

* The series in the coincident economic index based on The Conference Board’s estimates is monthly cash earnings.  There is no forecasted series in the leading economic index.

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

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