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Benchmark Revisions - May 2008

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Released: Monday, April 16, 2007

The Conference Board announced today that the leading index for Mexico increased 0.6 percent, while the coincident index decreased 0.1 percent in February.

  • The leading index increased in February following a sharp decline in January. Oil prices and net insufficient inventories were the main contributors to the gain offsetting falling stock prices and real exchange rate. Despite the increase in February, the six-month growth of the leading index was still 0.9 percent below zero (a -1.8 percent annual rate), down from the rapid growth of about a 6.0 to 7.0 percent annual rate in the middle of 2006. However, strengths and weaknesses in the leading index have been somewhat balanced in the last several months.
  • The coincident index fell slightly in February for the third consecutive month, driven by a decline in industrial production and an increase in the unemployment rate. Despite recent volatility, the coincident index continues to grow on a flat to slightly rising trend, but its growth rate has moderated in recent months. At the same time, real GDP slowed to a 2.3 percent annual rate in the second half of 2006 (including a 1.9 percent rate in the fourth quarter), down from the 6.3 percent average annual rate in the first half of the year. Despite short-term volatility, the recent behavior in the leading index still suggests that slow economic growth is likely to continue in the near term.

LEADING INDICATORS. Two of the six components that make up the leading index increased in February. The positive contributors to the index — from the larger positive contributor to the smaller one — are the US refiners' acquisition cost of domestic and imported crude oil and net insufficient inventories. The stock prices, the (inverted) real exchange rate, and the industrial production construction component* decreased, while the (inverted) federal funds rate remained unchanged in February.

With the 0.6 percent increase in February, the leading index now stands at 160 (1990=100). Based on revised data, this index declined 0.9 percent in January and increased 0.4 percent in December. During the six-month span through February, the index decreased 0.9 percent, with three of the six components increasing (diffusion index, six-month span equals 50.0 percent).

COINCIDENT INDICATORS. Two of the four components that make up the coincident index increased in February. The positive contributors — from the larger positive contributor to the smaller one — are number of people employed (measured by IMSS beneficiaries)* and retail sales*. The (inverted) unemployment rate and industrial production declined in February.

With the decrease of 0.1 percent in February, the coincident index now stands at 118.4 (1990=100). Based on revised data, this index decreased 0.1 percent in both January and December. During the six-month span through February, the index increased 0.3 percent, with two of the four components increasing (diffusion index, six-month span equals 50.0 percent).

DATA AVAILABILITY. The data series used to compute the two composite indexes reported in the tables in this release are those available "as of" 10 A.M. April 13, 2007. Some series are estimated as noted below.

NOTES: Series in the leading index based on The Conference Board estimates include industrial production — construction component. The series in the coincident index based on The Conference Board estimates include retail sales and unemployment rate.

THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.

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