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Benchmark Revisions - September 2005

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Released: Wednesday, December 7, 2011

Next month's release will incorporate annual benchmark revisions to the composite indexes. These regular benchmark revisions bring the indexes up-to-date with revisions in the source data. The revisions do not change the cyclical properties of the indexes. The indexes are updated throughout the year, but only for the previous six months. Data revisions that fall outside of the moving six-month window are incorporated when the benchmark revision is made and the entire histories of the indexes are recomputed. As a result, the revised indexes and their month-over-month changes will no longer be directly comparable to those issued prior to the benchmark revision.

The Conference Board Leading Economic Index® (LEI) for Korea remained unchanged and The Conference Board Coincident Economic Index ® (CEI) for Korea increased 0.8 percent in October.

  • The Conference Board LEI for Korea was unchanged in October following a sharp decline in September. Negative contributions from real exports, value of machinery orders, and the bond yield (inverted) offset a large gain in stock prices this month. Between April and October this year, the leading economic index fell by 0.6 percent (about a -1.1 percent annual rate), sharply down from the increase of 3.7 percent (about a 7.4 percent annual rate) for the previous six months. Nevertheless, the strengths and weaknesses among the leading indicators have been roughly balanced in the last six months.
  • The Conference Board CEI for Korea, a measure of current economic activity, increased in October, reversing its decline in September.  All of the coincident indicators advanced this month. With the gain in October, the coincident economic index increased by 1.4 percent (about a 2.8 percent annual rate) between April and October this year, only slightly down from the 1.7 percent increase (about a 3.4 percent annual rate) between October 2010 and April 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 has been on a slight downward trend since mid-2011, and its six-month growth rate has remained negative in September and October. Meanwhile, the six month growth rate of The Conference Board CEI for Korea has been relatively stable so far this year. 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.  Three of the seven components that make up The Conference Board LEI for Korea increased in October. The positive contributors – from the largest positive contributor to the smallest – were stock prices, the (inverted) index of inventories to shipments, and letter of credit arrivals.  Negative contributors – from the largest negative contributor to the smallest – were real exports FOB, value of machinery orders, the (inverted) yield of government public bonds, and private construction orders.    

With no change in October, The Conference Board LEI for Korea now stands at 121.3 (2004=100).  Based on revised data, this index declined 0.7 percent in September and increased 0.4 percent in August.  During the six-month span through October, the leading economic index decreased 0.6 percent, with three of the seven components advancing (diffusion index, six-month span equals 57.1 percent).

COINCIDENT INDICATORS. All four components that make up The Conference Board CEI for Korea increased in October.  The positive contributors– in order from the largest positive contributor to the smallest – were total employment, industrial production, monthly cash earnings*, and the wholesale and retail sales component.  

With the 0.8 percent increase in October, The Conference Board CEI for Korea now stands at 116.6 (2004=100).  Based on revised data, this index decreased 0.8 percent in September and increased 0.3 percent in August. During the six-month span through October, the coincident economic index increased 1.4 percent, with all four components advancing (diffusion index, six-month span equals 100.0 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 December 6, 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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