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Benchmark Revisions - May 2006

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Released: Wednesday, December 12, 2007

The Conference Board reports today that the leading index for France increased 0.3 percent and the coincident index increased 0.2 percent in October.

  • The leading index increased again in October and it has grown slowly, but steadily since February. In October, new unemployment claims (inverted) and stock prices were the largest positive contributors to the index, while industrial new orders was the largest negative contributor. In the six months from April to October, the leading index has grown by 0.9 percent (approximately a 1.9 percent annual rate), picking up slightly from a 0.5 percent growth rate (about a 1.1 percent annual rate) for the period from October 2006 through April 2007. The strengths and the weaknesses among the leading indicators have been roughly balanced throughout the past six months.
  • The coincident index increased in October. Though the coincident index has increased in five of the past six months, these gains have been relatively small. During the past six months since April, the coincident index has increased by 0.6 percent (approximately a 1.2 percent annual rate), slowing down from about 2.5 to 3.0 percent growth in the first quarter. However, the strengths among the coincident indicators have been very widespread during the past six months.
  • Since February, the leading index has increased at a slight but steady pace following an essentially flat period from July 2006 through January 2007. At the same time, real GDP growth increased from a 1.4 percent annual rate in the second quarter to a 2.9 percent annual rate in the third quarter, its largest quarterly gain since the second quarter of 2006. The recent behavior of the leading and coincident indexes suggests that moderate economic growth is likely to continue in the near term.

LEADING INDICATORS. Five of the seven components of the leading index increased in October. The positive contributors to the index — in order from the largest positive contributor to the smallest — are the inverted new unemployment claims, the stock price index, production expectations, the yield spread, 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 industrial new orders and building permits (residential).

With the increase of 0.3 percent in October, the leading index now stands at 130.9 (1990=100). Based on revised data, this index increased 0.2 percent in September and increased 0.1 percent in August. During the six-month span through October, the leading index increased 0.9 percent, and three of the seven components increased (diffusion index, six-month span equals 50.0 percent).

COINCIDENT INDICATORS. Three of the four components of the coincident index increased in October. The positive contributors to the index were industrial production, employment* and wage and salaries*. Personal consumption declined in October.

With the increase of 0.2 percent in October, the coincident index now stands at 122.7 (1990=100). Based on revised data, this index decreased 0.1 percent in September and increased 0.1 percent in August. During the six-month period through October, the coincident index increased 0.6 percent, with four of the four series making a positive contribution (diffusion index, six-month span equals 100.0 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 December 10, 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 October 2007 release the FRANCE LEADING ECONOMIC INDICATORS AND RELATED COMPOSITE INDEXES underwent a benchmark revision. For more information on these benchmark revisions please visit our website at http://www.conference-board.org/economics/bci/update.cfm?cid=3. Please also visit the web site of our research associate in France: http://www.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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