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Benchmark Revisions - May 2006

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Released: Wednesday, October 17, 2007

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

  • The leading index increased slightly in August and there were upward revisions for March through June as data for the deflator of manufacturing value added to unit labor cost (quarterly) component for the second quarter became available. As a result, the leading index increased by 1.1 percent from February through August (about a 2.2 percent annual rate), picking up from slightly negative growth in the first quarter of 2007. In August, new unemployment claims (inverted) was the largest positive contributor by a wide margin, but this was offset by the large decline in stock prices.
  • The coincident index also increased in August, and there were upward revisions for the previous four months as a result of data revisions in private sector employment, but there were also small downward revisions in the wages and salaries (financial and nonfinancial) component. The strengths among the coincident indicators continued to be widespread, but its six month growth rate has declined somewhat; the index grew 0.7 percent from February through August (about a 1.4 percent annual rate), down from a 1.6 percent growth rate (about a 3.2 percent annual rate) from August 2006 through February of 2007.
  • Since February, the leading index has grown slightly following an essentially flat period in the second half of 2006, and the strengths among the leading indicators have been somewhat more widespread than the weaknesses in the first half of 2007. During the first half of 2007, real GDP grew at an average annual rate of about 1.8 percent (including a 1.2 percent rate in the second quarter). The recent behavior of the leading and coincident indexes still suggests that slow to moderate economic growth should continue in the near term.

LEADING INDICATORS. Five of the seven components of the leading index increased in August. 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, building permits (residential), the ratio of the deflator of manufacturing value added to unit labor cost for manufacturing* and production expectations. The only negative contributor is the stock price index. Industrial new orders remained unchanged in August.

With the increase of 0.1 percent in August, the leading index now stands at 130.2 (1990=100). Based on revised data, this index increased 0.1 percent in July and increased 0.2 percent in June. During the six-month span through August, the leading index increased 1.1 percent, and five of the seven components increased (diffusion index, six-month span equals 71.4 percent).

COINCIDENT INDICATORS. All four components of the coincident index increased in August. The positive contributors to the index are employment*, wage and salaries*, personal consumption and industrial production. There were no negative contributors.

With the increase of 0.2 percent in August, the coincident index now stands at 122.7 (1990=100). Based on revised data, this index increased 0.2 percent in July and increased 0.1 percent in June. During the six-month period through August, the coincident index increased 0.7 percent, with four of the four series making a positive contribution (diffusion index, six-month span equals 100.0 percent).

* See notes under data availability.

Please visit the web site of our research associate in France: http://www.rexecode.fr/index.jsv

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 October 15, 2007. 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 please visit us here at http://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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