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Benchmark Revisions - September 2005

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Released: Wednesday, October 17, 2012

The Conference Board Leading Economic Index® (LEI) for Korea declined 0.7 percent and The Conference Board Coincident Economic Index® (CEI) for Korea declined 0.2 percent in August.

  • The Conference Board LEI for Korea fell in August for the fifth consecutive month, and the index was revised downward in July after revised data for the index of inventories to shipments became available. Positive contributions from stock prices and the (inverted) bond yield were more than offset by large negative contributions from the index of inventories to shipments as well as letter of credit arrivals. Between February and August 2012, the leading economic index contracted by 2.9 percent (about a -5.7 percent annual rate), down sharply from the 0.9 percent increase (about a 1.8 percent annual rate) during the previous six months. Additionally, the weaknesses among the leading indicators have become very widespread in the last six months.
  • The Conference Board CEI for Korea, a measure of current economic activity, also fell in August. The six-month growth rate of the coincident economic index has turned negative, contracting by 0.4 percent (about a -0.8 percent annual rate) between February and August 2012, down from an increase of 1.8 percent (about a 3.7 percent annual rate) during the previous six months. At the same time, real GDP grew at a 1.1 percent annual rate in the second quarter of 2012, down from 3.5 percent (annual rate) in the first quarter.  
  • The LEI for Korea has been declining for the past five months through August. As a result, its six-month growth rate turned negative in July. Meanwhile, The CEI for Korea also fell in August, and its six-month growth rate has become negative for the first time since April 2009. Taken together, the composite indexes and their components suggest that the rate of economic growth is likely to remain slow in the near term.

LEADING INDICATORS. Three 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 stock prices, the (inverted) yield of government public bonds, and real exports FOB.  Negative contributors – from the largest negative contributor to the smallest – were the (inverted) index of inventories to shipments, letter of credit arrivals, private construction orders, and value of machinery orders.    

With the 0.7 percent decrease in August, The Conference Board LEI for Korea now stands at 118.5 (2004=100). Based on revised data, this index declined 0.3 percent in July and declined 0.7 percent in June. During the six-month span through August, the leading economic index decreased 2.9 percent, with one of the seven components advancing (diffusion index, six-month span equals 14.3 percent).

COINCIDENT INDICATORS. Two 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 and monthly cash earnings*. The wholesale and retail sales component and industrial production declined in August.

With the 0.2 percent decrease in August, The Conference Board CEI for Korea now stands at 117.5 (2004=100). Based on revised data, this index increased 0.2 percent in July and decreased 0.4 percent in June. During the six-month span through August, the coincident economic index decreased 0.4 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 October 16, 2012.  

* 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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