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Benchmark Revisions - January 2008

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Released: Thursday, April 19, 2007

The Conference Board announced today that the leading index for Australia increased 1.4 percent and the coincident index increased 0.1 percent in February.

  • The leading index increased sharply in February following a small decline in January. All components of the leading index rose in February. Rural goods exports, real money supply (M3), and building approvals were the largest contributors to February's increase. With this gain, the six-month growth rate of the leading index rebounded to 2.4 percent (a 4.9 percent annual rate), only slightly below the recent highest growth of about 2.7 percent in August 2006 (slightly over 5.5 percent annual rate). In addition, the strengths among the leading indicators have been more widespread than weaknesses in recent months.
  • The coincident index increased slightly again in February. This index of current economic activity has been on a steadily rising trend since early 2006, following a brief pause from mid-2005 to the beginning of 2006. The strengths among the coincident indicators have also been consistently very widespread. At the same time, real GDP growth picked up to a 4.2 percent annual rate in the fourth quarter of 2006 (a 2.8 percent average annual rate in the second half of the year). The recent behavior of the coincident and leading indexes suggests that the economy is likely to grow at a moderate to somewhat stronger rate in the near term.

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

With the 1.4 percent increase in February, the leading index now stands at 168.5 (1990=100). Based on revised data, this index declined 0.2 percent in January and increased 0.2 percent in December. During the six-month period through February, the leading index increased 2.4 percent, and six of the eight components increased (diffusion index, six-month span equals 81.3 percent).

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

With the increase of 0.1 percent in February, the coincident index now stands at 121.0 (1990=100). Based on revised data, this index increased 0.2 percent in both January and December. During the six-month period through February, the coincident index increased 0.9 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" 10 A.M. ET on April 18, 2007. 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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