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Benchmark Revisions - May 2008

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Released: Monday, August 25, 2008

The Conference Board announced today that the leading index for Mexico increased 0.4 percent and the coincident index increased 0.7 percent in June.

  • The leading index increased modestly in June after a sharp decline in May. In June, sizable positive contributions from oil prices and industrial production (construction) more than offset large declines in stock prices and the net insufficient inventories component. Since December, the leading index has grown by 4.1 percent (about an 8.3 percent annual rate), well above the 2.8 percent rate (a 5.7 percent annual rate) for the second half of 2007. Despite the rapid growth in the leading index, the strengths among the leading indicators have not been very widespread in recent months — instead strengths have been roughly balanced with weaknesses.
  • The coincident index also increased in June after declining sharply in May. During the last six months, the coincident index has increased by 0.8 percent (about a 1.7 percent annual rate), well below the 5.1 percent annual rate of growth that prevailed in the second half of 2007. In addition, the strengths among the coincident indicators have been more widespread than weaknesses.
  • After declining late in 2007 through the start of this year, the leading index has resumed growing in February, but this rapid growth moderated somewhat in recent months. At the same time, the coincident index has been fluctuating around an essentially flat trend after strong growth throughout most of 2007. Real GDP grew at about a 2.1 percent annual rate in the first quarter of 2008, down from a 4.2 percent average annual rate in the second half of 2007. Taken together, the recent behavior of the leading and coincident indexes suggests that the economy should continue expanding at a moderate pace in the near term.

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

With the 0.4 percent increase in June, the leading index now stands at 173.8 (1990=100). Based on revised data, this index declined 0.8 percent in May and increased 2.7 percent in April. During the six-month span through June, the index increased 4.1 percent, with three of the six components increasing (diffusion index, six-month span equals 50.0 percent).

COINCIDENT INDICATORS. Two of the three components that make up the coincident index increased in June. The positive contributors — from the largest positive contributor to the smallest one — are industrial production and number of people employed (measured by total IMSS beneficiaries). Retail sales* declined in June.

With the increase of 0.7 percent in June, the coincident index now stands at 169.9 (1990=100). Based on revised data, this index decreased 0.9 percent in May and increased 0.8 percent in April. During the six-month span through June, the index increased 0.8 percent, with two of the three components increasing (diffusion index, six-month span equals 66.7 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. August 21, 2008. Some series are estimated as noted below.

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

With the June 2008 release of the Mexico leading economic indicators and related composite indexes, the employment component of the coincident index, as measured by total IMSS (Instituto Mexicano del Seguro Social) beneficiaries, has been revised for Dec. 2007 through June 2008.

These revised figures are the result of methodological changes by IMSS. When the longer history of this series is made available by the IMSS, it will be used in the history of the coincident index.

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

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