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Benchmark Revisions - January 2008

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Released: Monday, June 27, 2005

The Conference Board announced today that the leading index for Australia increased 0.5 percent, and the coincident index was unchanged in April.

  • The leading index increased in April after being essentially flat for the previous four months because of large downward revisions in the previous several months, as actual data for sales to inventory ratio for the first quarter of 2005 became available. As a result, the growth rate of the leading index has slowed to about a 1.0 to 2.0 percent annual rate, well below the 5.0 to 6.0 percent reached in the first half of 2004, but this weakness is not widespread.
  • The coincident was unchanged in April, but it is still on a steady rising trend. At the same time, real GDP increased at a 2.8 percent annual rate in the first quarter of 2005, up from 1.5 percent growth in 2004, but still well below the 4.5 growth rate in 2003. The current behavior of the leading index suggests that the economy will continue to grow in the near term, more rapidly than in 2004 but less rapidly than in the latest quarter.

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

With the 0.5 percent increase in April, the leading index now stands at 155.2 (1990=100). Based on revised data, this index decreased 0.3 percent in March and increased 0.1 percent in February. During the six-month period through April, the leading index increased 0.8 percent, and four of the eight components increased (diffusion index, six-month span equals 56.3 percent).

Coincident Indicators.Two of the five components in the coincident index increased in April. The increases - in order from the larger positive contributor to the smaller – occurred in employed persons and household gross disposable income*. Retail trade declined, while industrial production* and the (inverted) unemployment rate remained unchanged in April.

Holding steady in April, the coincident index now stands at 117.9 (1990=100). Based on revised data, this index increased 0.2 percent in both March and February. During the six-month period through April, the coincident index increased 0.8 percent, with four of the five components in the series making positive contributions (diffusion index, six-month span equals 80.0 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 June 23, 2005. 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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