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Benchmark Revisions - January 2008

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Released: Wednesday, March 24, 2004

The Conference Board announced today that the leading index for Australia increased 0.1 percent, and the coincident index remained unchanged in January.

  • The leading index increased slightly in January following a very large increase in December 2003. It is important to note that there were large upward revisions to previous months because actual data on the sales to inventory component became available. As a result, the leading index has increased at a 5.6 percent annual rate from its most recent low in July 2003, although it continues to be volatile from month to month.
  • Despite remaining flat in January, the coincident index continues to be on an upward trend from its most recent low in March 2003. At the same time, real GDP increased at a 5.5 percent annual rate in the second half of 2003, up from 2.5 percent during the first half of the year.
  • The leading index has been signaling a pick up in the rate of economic growth, which occurred in the second half of 2003. The leading index is currently signaling a continuation of relatively strong economic growth in the first half of 2004.

Leading Indicators.Four of the eight components in the leading index increased in January. The positive contributors to the index — in order from the largest positive contributor to the smallest — are money supply*, rural goods exports*, sales to inventories ratio*, and gross operating surplus*. Building approvals*, the (inverted) “medium-term” government bond yield, yield spread, and share prices declined in January.

With the 0.1 percent increase in January, the leading index now stands at 151.8 (1990=100). Based on revised data, this index increased 0.9 percent in December and increased 0.1 percent in November. During the six-month period through January, the leading index increased 2.8 percent, and five of the eight components increased (diffusion index, six-month span equals 68.8 percent).

Coincident Indicators. Four of the five components in the coincident index increased in January. The increases - in order from the largest positive contributor to the smallest – occurred in employed persons, household gross disposable income*, retail trade*, and industrial production*. The (inverted) unemployment rate declined in January.

Holding steady in January, the coincident index now stands at 115.6 (1990=100). Based on revised data, this index increased 0.1 percent in December and increased 0.2 percent in November. During the six-month period through January, the coincident index increased 1.2 percent, with all five components in the series making positive contributions (diffusion index, six-month span equals 100.0 percent).

Data Availability. The data series used by The Conference Board to compute the two composite indexes reported in the tables in this release are those available “as of” 5 P.M. ET on March 24, 2004. Some series are estimated as noted below.

NOTES: Series in the leading index that are based on The Conference Board estimates are sales to inventory ratio and gross operating surplus for private non-financial corporations, the implicit price index used to deflate rural goods exports and building approvals, and the CPI used to deflate money supply M3. Series in the coincident index that are based on The Conference Board estimates are industrial production and household disposable income. CPI was used to deflate retail trade.

Due to the Reserve Bank of Australia’s discontinuation of the 3-month Treasury Bill (for details see “For the Record” in the June 2002 RBA bulletin), The Conference Board will use the Bank Accepted Bill 90 Days to calculate the yield spread from now on.

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

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