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Benchmark Revisions - September 2005

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Released: Wednesday, November 9, 2011

The Conference Board Leading Economic Index®(LEI) for Korea declined 0.7 percent and The Conference Board Coincident Economic Index® (CEI) for Korea declined 0.9 percent in September.

  • The Conference Board LEI for Korea declined in September following a gain in August. The (inverted) index of inventories to shipments, construction orders, and stock prices all made large negative contributions to the index this month. With the decline in September, the six-month change in the leading economic index continued to slow — falling by 0.9 percent (about a -1.8 percent annual rate), significantly down from the increase of 5.7 percent (about an 11.7 percent annual rate) for the previous six months. Moreover, the weaknesses among the leading indicators have been slightly more widespread than the strengths in recent months.
  • The Conference Board CEI for Korea, a measure of current economic activity, also fell in September.  Total employment and the wholesale and retail sales component both declined sharply this month. With the decline, the coincident economic index fell by 0.2 percent (about a  -0.3 percent annual rate) between March and September this year, down from the 1.9 percent increase (about a 3.7 percent annual rate) between September 2010 and March 2011.  At the same time, real GDP grew at a 3.0 percent annual rate in the third quarter this year, slightly slower than the 3.6 percent annual rate in the second quarter. 
  • The Conference Board LEI for Korea fell sharply in September, and its six-month growth rate has turned negative. Meanwhile, The Conference Board CEI for Korea also declined in September, and its growth rate became negative for the first time since early 2009. Taken together, the recent behavior of the composite indexes suggests that economic activity should continue growing, but at a more moderate rate, in the near term. 

 

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

With the 0.7 percent decrease in September, The Conference Board LEI for Korea now stands at 121.4 (2004=100).  Based on revised data, this index increased 0.4 percent in August and declined 0.2 percent in July.  During the six-month span through September, the leading economic index decreased 0.9 percent, with three of the seven components advancing (diffusion index, six-month span equals 42.9 percent).

COINCIDENT INDICATORS.  Two of the four components that make up The Conference Board CEI for Korea increased in September.  The positive contributors– in order from the larger positive contributor to the smaller – were industrial production and monthly cash earnings*.   Total employment and the wholesale and retail sales component declined in September.

With the 0.9 percent decrease in September, The Conference Board CEI for Korea now stands at 115.1 (2004=100).  Based on revised data, this index increased 0.3 percent in August and increased 0.1 percent in July. During the six-month span through September, the coincident economic index decreased 0.2 percent, with one of the four components advancing (diffusion index, six-month span equals 37.5 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 November 8, 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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