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Benchmark Revisions - January 2008

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Released: Monday, December 20, 2004

The Conference Board announced today that the leading index for Australia increased 0.3 percent and the coincident index increased 0.2 percent in October.

  • The leading index increased again in October, but there were large downward revisions to the leading index in the previous several months as actual third-quarter data for the sales-to-inventory ratio and the gross operating surplus became available. As a result, the growth rate of the leading index has slowed to a 2.0 to 3.0 percent annual rate in recent months from about a 5.0 percent rate in the first half of the year.
  • The coincident index also increased in October, and has been on a gradually rising trend since the second half of 2003. At the same time, real GDP growth slowed to a 1.2 percent annual rate in the third quarter of 2004, down from a 3.1 percent average rate in the first half of the year and 6.5 percent in the second half of 2003. The current behavior of the leading index suggests that there should be some pickup in real GDP growth from the third quarter’s sluggish rate.

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

With the 0.3 percent increase in October, the leading index now stands at 154.6 (1990=100). Based on revised data, this index increased 0.1 percent in September and decreased 0.1 percent in August. During the six-month period through October, the leading index increased 1.1 percent, and five of the eight components increased (diffusion index, six-month span equals 62.5 percent).

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

With the 0.2 percent increase, the coincident index now stands at 117.1 (1990=100). Based on revised data, this index increased 0.3 percent in September and was unchanged in August. During the six-month period through October, the coincident index increased 0.7 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 December 17, 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.

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

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