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Benchmark Revisions - January 2008

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Released: Wednesday, November 29, 2006

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

  • The leading index remained unchanged in September. Building approvals made the largest negative contribution to the leading index which was offset by a positive contribution from the real money supply (M3). The leading index has been growing at about a 3.0 to 4.0 percent annual rate in recent months. Although the building approvals component decreased again in September, the strengths among the leading indicators have been more widespread than weaknesses.
  • The coincident index increased slightly again in September and the August value was revised up to a slight increase from no change. The coincident index remains on an upward trend it has maintained since mid-2005, and strengths have been more widespread than weaknesses among coincident indicators. At the same time, real GDP grew at a 2.0 percent annual rate in the first half of 2006, only slightly up from a 1.9 percent average annual rate in the second half of 2005. The recent behavior of the leading index suggests moderate economic growth should continue in the near future.

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

The leading index now stands at 163.9 (1990=100). Based on revised data, this index increased 0.4 percent in August and increased 0.3 percent in July. During the six-month period through September, the leading index increased 1.7 percent, and six of the eight components increased (diffusion index, six-month span equals 75.0 percent).

COINCIDENT INDICATORS. Two of the five components in the coincident index increased in September. The increases — in order from the largest positive contributor to the smallest — occurred in the (inverted) unemployment rate and household gross disposable income*. Retail trade, industrial production* and the number of employed persons declined in September.

With the increase of 0.1 percent in September, the coincident index now stands at 119.4 (1990=100). Based on revised data, this index increased 0.1 percent in August and increased 0.2 percent in July. During the six-month period through September, the coincident index increased 0.3 percent, with two of the five components in the series making positive contributions (diffusion index, six-month span equals 60.0 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" 10 A.M. ET on November 29, 2006. 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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