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Benchmark Revisions - January 2008

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Released: Wednesday, March 26, 2008

The Conference Board announced today that the leading index for Australia declined 0.3 percent and the coincident index increased 0.1 percent in January.

  • The leading index declined in January, following five consecutive monthly increases in the index. Negative contributions from share prices, the yield spread and building approvals more than offset positive contributions from money supply, gross operating surplus and rural goods exports. The leading index increased 2.6 percent (a 5.3 percent annual rate) from July 2007 to January 2008, up from its six-month growth rate of 1.1 percent (a 2.2 percent annual rate) for the previous six months, but the strengths among its components have became less widespread in recent months.
  • The coincident index increased for the third straight month in January. Employed persons continued to make the largest positive contribution to the index. The six-month growth rate of the coincident index has continued to slow, decreasing to 0.8 percent (a 1.5 percent annual rate) from July 2007 to January 2008, from 1.3 percent (a 2.7 percent annual rate) at the start of the fourth quarter of 2007, while the strengths among the coincident indicators have become balanced with the weaknesses in recent months.
  • The leading index has weakened slightly over the past couple of months, after growing at a fairly strong pace in the second half of 2007, and the strengths among the leading indicators have become less widespread. Meanwhile, the coincident index has continued to increase, although its growth rate has gradually slowed. Real GDP growth slowed to a 2.4 percent annual rate in the fourth quarter, down from an average annual rate of 4.4 percent for the first three quarters of 2007. The current behavior of the composite indexes suggests that economic growth should continue in the near term, though probably at a more moderate pace.

LEADING INDICATORS. Three of the seven 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*, gross operating surplus*, and rural goods exports*. Share prices, the yield spread, building approvals*, and the sales to inventories ratio declined.

With the 0.3 percent decrease in January, the leading index now stands at 185.7 (1990=100). Based on revised data, this index increased 0.1 percent in December and increased 0.6 percent in November. During the six-month period through January, the leading index increased 2.6 percent, and four of the seven components increased (diffusion index, six-month span equals 57.1 percent).

COINCIDENT INDICATORS. Three of the four components in the coincident index increased in January. The increases — in order from the largest positive contributor to the smallest — occurred in employed persons, retail trade, and household gross disposable income*. Industrial production* declined in January.

With the increase of 0.1 percent in January, the coincident index now stands at 144.5 (1990=100). Based on revised data, this index increased 0.1 percent in December and increased 0.1 percent in November. During the six-month period through January, the coincident index increased 0.8 percent, with two of the four components in the series making positive contributions (diffusion index, six-month span equals 50.0 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 March 24, 2008. 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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