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Benchmark Revisions - November 2006

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Released: Monday, August 11, 2003

The Conference Board reports today that the leading index for Japan increased 0.5 percent and the coincident index was unchanged in June.

  • The leading index increased by 0.5 percent in June, the second significant consecutive monthly increase. The latest increase was widespread, as indicated by an increase in the diffusion index to 70 percent. The six-month diffusion index has also now been above 50 percent for the second consecutive month.
  • The coincident index, a measure of current economic activity, was flat in June after increasing significantly in May. The six-month diffusion index has picked up in recent months to 67 percent in June, indicating more widespread strength.
  • The weakening of the growth rate of the leading index from early 2002 to early 2003 was reflected in a slowing of economic growth through the first quarter of this year. The recent pickup in the leading index is consistent with stronger economic growth in the near-term, but whether this is the beginning of a sustained recovery remains to be seen.

Leading Indicators. Seven of the ten components that make up the leading index increased in June. The positive contributors to the index – in order from the largest positive contributor to the smallest – include the stock price index, dwelling units started, real money supply, yield spread, (inverted) business failures, new orders for machinery and construction*, and the Tankan business conditions survey*. Three components decreased in June. The negative contributors to the index – in order from the largest negative contributor to the smallest – include the six month growth rate of labor productivity*, index of overtime worked (manufacturing), and real operating profits*.

With an increase of 0.5 percent in June, the leading index now stands at 91.5 (1990=100). Based on revised data, this index increased 0.6 percent in May and decreased 0.2 percent in April. During the six-month span through June, the index decreased 0.2 percent, and seven of the ten components advanced (diffusion index, six-month span equals 70.0 percent).

Coincident Indicators. Two of the six components that make up the coincident index increased in June. The positive contributors – in order from the larger positive contributor to the smaller one – are the number of employed persons and wage and salary income*. The negative contributors to the index – in order from the largest negative contributor to the smallest – include real wholesale sales, industrial production, and real retail sales. Real manufacturing sales* was unchanged.

With no change in June, the coincident index now stands at 101.8 (1990=100). Based on revised data, this index increased 0.6 percent in May and decreased 0.4 percent in April. During the six-month span through June, the index increased 0.2 percent, and four of the components advanced (diffusion index, six-month span equals 66.7 percent).

Data Availability. The data series used to compute the two composite indexes reported in this release are those available “as of” 5:00 P.M. ET August 7, 2003. Some series are estimated as noted below.

*Notes: The series in the leading index that are based on The Conference Board estimates are real operating profits, the six-month growth rate of labor productivity, the Tankan business conditions survey, and new orders for machinery and construction. The series in the coincident index that are based on The Conference Board estimates are real manufacturing sales and wage and salary income.

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

Global Indicators

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