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Benchmark Revisions - May 2006

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Released: Wednesday, November 15, 2006

The Conference Board reports today that the leading index for France increased 0.2 percent and the coincident index decreased 0.1 percent in September.

  • The leading index increased in September, following no change in August. Building permits made the largest negative contribution to the leading index, offsetting large positive contributions from new unemployment insurance claims (inverted) and the yield spread. From March to September, the leading index grew 2.4 percent (about a 4.8 percent annual rate), down slightly from the 3.3 percent average growth rate in the second quarter. In addition, the strengths and weaknesses among the leading indicators have become roughly balanced in recent months.
  • The coincident index decreased slightly in September, driven by large negative contributions from personal consumption of manufactured goods and industrial production. Despite some short-term volatility, this index of current economic activity has been on a slightly rising trend since mid-2003, but its growth has moderated slightly (down to about a 1.0 percent annual rate) in recent months. The strengths and weaknesses among the coincident indicators have also become balanced in recent months.
  • Following a sharp pick up through mid-2006, the growth rate of the leading index moderated slightly in recent months. At the same time, real GDP increased at a 4.9 percent annual rate in the second quarter of 2006, following a 1.8 percent annual rate in the first quarter. The recent behavior of the leading index suggests that economic growth is likely to continue at a moderate rate in the near term.

LEADING INDICATORS. Four of the seven components of the leading index increased in September. 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, the stock price index, and the ratio of the deflator of manufacturing value added to unit labor cost for manufacturing*. The negative contributors to the index — beginning with the largest negative contributor — are building permits (residential) and production expectations. Industrial new orders remained unchanged in September.

With the increase of 0.2 percent in September, the leading index now stands at 129.7 (1990=100). Based on revised data, this index remained unchanged in August and increased 0.4 percent in July. During the six-month span through September, the leading index increased 2.4 percent, and four of the seven components increased (diffusion index, six-month span equals 57.1 percent).

COINCIDENT INDICATORS. Two of the four components of the coincident index increased in September. The positive contributors to the index — in order from the largest positive contributor to the smallest — are employment* and wage and salaries*. The negative contributors to the index — beginning with the largest negative contributor — are personal consumption and industrial production.

With the decrease of 0.1 percent in September, the coincident index now stands at 120.0 (1990=100). Based on revised data, this index increased 0.3 percent in August and remained unchanged in July. During the six-month period through September, the coincident index increased 0.3 percent, with two of the four series making a positive contribution (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 November 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. For more information on these benchmark revisions look here on our website at www.conference-board.org/economics/bci/update.cfm?cid=3.

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

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