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Benchmark Revisions - May 2006

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Released: Monday, July 17, 2006

The Conference Board reports today that the leading index for France increased 0.2 percent and the coincident index increased 0.2 percent in May.

  • The leading index increased slightly in May and it has increased in five of the last six months. May's gain was driven by new unemployment claims (inverted) and yield spread, offsetting negative contributions from four of the seven components. With May's gain, the growth of the leading index has picked up and the leading index has increased 2.9 percent from November to May. In addition, the strengths among the leading indicators have been more widespread than weaknesses in recent months.
  • The coincident index increased slightly in May. Despite some short term volatility, this index of current economic activity has been on a slightly rising trend since mid-2003. The strengths among the coincident indicators have also been widespread in recent months. At the same time, real GDP increased at a 2.2 percent annual rate in the first quarter of 2006, up from the 1.8 percent average rate in the second half of 2005. The recent behavior of the leading index suggests that moderate to strong economic growth is likely to continue in the near term.

LEADING INDICATORS. Three of the seven components of the leading index increased in May. The positive contributors to the index- in order from the largest positive contributor to the smallest- are the inverted new unemployment claims, the yield spread, and industrial new orders. The negative contributors to the index- beginning with the largest negative contributor- are the stock price index, production expectations, building permits (residential), and the ratio of the deflator of manufacturing value added to unit labor cost for manufacturing*.

With the increase of 0.2 percent in May, the leading index now stands at 127.9 (1990=100). Based on revised data, this index increased 1.0 percent in April and increased 0.1 percent in March. During the six-month span through May, the leading index increased 2.9 percent, and five of the seven components increased (diffusion index, six-month span equals 78.6 percent).

COINCIDENT INDICATORS. All of the four components of the coincident index increased in May. The positive contributors to the index- in order from the largest positive contributor to the smallest- were industrial production, wage and salaries*, personal consumption, and employment*.

With the increase of 0.2 percent in May, the coincident index now stands at 119.7 (1990=100). Based on revised data, this index increased 0.1 percent in April and increased 0.1 percent in March. During the six-month period through May, the coincident index increased 0.7 percent, with all of the four series making a positive contribution (diffusion index, six-month span equals 100.0 percent).

* See notes under data availability.

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 July 13, 2006. Some series are estimated as noted below.

NOTES: Series in the leading index that are based on The Conference Board estimates are ratio deflator of manufacturing value added to unit labor cost in manufacturing. Series in the coincident index that are based on The Conference Board estimates are number of employees and wage and salaries.

With the May 2006 release the FRANCE LEADING ECONOMIC INDICATORS AND RELATED COMPOSITE INDEXES underwent a benchmark revision. More information on these benchmark revisions are provided here on our website.

Also visit the web site of our research associate in France: www.coe-rexecode.fr/index.jsv.

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

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