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Benchmark Revisions - January 2008

Press Release Archive

Released: Wednesday, May 28, 2008

The Conference Board announced today that the leading index for Australia declined 0.4 percent and the coincident index increased 0.1 percent in March.

  • The leading index declined again in March, the third consecutive monthly decline. Building approvals, share prices and the yield spread continued to make large negative contributions to the index, more than offsetting a large positive contribution from real money supply. The six-month growth rate in the leading index stands at 0.8 percent (about a 1.5 percent annual rate) during the six-month span through March, down from 2.7 percent (a 5.5 percent annual rate) from June to December 2007. In addition, the strengths among its components have only been slightly more widespread than the weaknesses in recent months.
  • The coincident index, a measure of current economic activity, increased slightly again for the second consecutive month in March. Employment again provided the primary source of growth in March, and continued to offset weakness in industrial production. The six-month growth rate of the coincident index has gradually slowed to 0.3 percent (a 0.7 percent annual rate) during the six-month span through March, down from 0.8 percent (a 1.7 percent annual rate) in the second half of 2007. In addition, the weaknesses among the coincident indicators have been very widespread over the last six months.
  • The leading index has declined moderately through the first quarter of this year, after growing at a fairly rapid pace since the middle of 2007. Meanwhile, the coincident index has barely increased in recent months, interrupting an uptrend in the index that began in early 2006. Real GDP growth slowed to an average annual rate of 3.4 percent in the second half of 2007 (including a 2.4 percent annual rate in the fourth quarter), down from an average annual rate of 4.5 percent in the first half of last year. The recent behavior of the composite indexes so far suggests more moderate economic growth is likely to continue in the near term.

LEADING INDICATORS. Four of the seven components in the leading index increased in March. The positive contributors to the index — in order from the largest positive contributor to the smallest — are money supply*, gross operating surplus*, the sales to inventories ratio*, and rural goods exports*. Building approvals*, share prices, and the yield spread declined.

With the 0.4 percent decrease in March, the leading index now stands at 184.2 (1990=100). Based on revised data, this index declined 0.3 percent in February and declined 0.4 percent in January. During the six-month period through March, the leading index increased 0.8 percent, and four of the seven components increased (diffusion index, six-month span equals 64.3 percent).

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

With the increase of 0.1 percent in March, the coincident index now stands at 144.5 (1990=100). Based on revised data, this index increased in February and remained unchanged in January. During the six-month period through March, the coincident index increased 0.3 percent, with one component in the series making a positive contribution (diffusion index, six-month span equals 25.0 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 May 27, 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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