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Benchmark Revisions - January 2008

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Released: Wednesday, June 25, 2008

The Conference Board announced today that the leading index for Australia increased 0.3 percent and the coincident index increased 0.1 percent in April.

  • The leading index increased in April, following three consecutive monthly declines. Building approvals and the yield spread continued to make negative contributions to the index this month, but these were more than offset by large positive contributions from rural goods exports, share prices, and real money supply. The six-month growth rate in the leading index has declined sharply to 0.1 percent (a 0.2 percent annual rate) during the six-month span through April, down from 2.8 percent (a 5.7 percent annual rate) in the six-month period from June to December 2007. In addition, the strengths among the leading indicators have only been slightly greater than the weaknesses over the past six months.
  • The coincident index increased slightly in April, following no change in March. As in past months, the growth in the index was driven primarily by a large gain in employment. The six-month growth rate in the coincident index stands at 0.5 percent (a 1.0 percent annual rate) during the six-month span through April, moderately lower than the 0.9 percent (a 1.8 percent annual rate) growth rate from June to December 2007, and the weaknesses among its components have remained widespread in recent months.
  • After rising steadily in the second half of 2007, the leading index declined moderately in the first quarter of the year. Meanwhile, the coincident index, a measure of current economic activity, has continued to increase, although its growth rate has slowed since August 2007. At the same time, real GDP growth slowed to an average annual rate of 2.6 percent for the first quarter of 2008 and the fourth quarter of 2007, down from an average annual rate of 4.7 percent for the previous two quarters. The recent behavior of the composite indexes suggests that the economy will continue to grow at a more moderate pace in the near term.

LEADING INDICATORS. Five of the seven components in the leading index increased in April. The positive contributors to the index — in order from the largest positive contributor to the smallest — are rural goods exports*, share prices, money supply*, the sales to inventories ratio*, and gross operating surplus*. Building approvals*, and the yield spread declined.

With the 0.3 percent increase in April, the leading index now stands at 185.1 (1990=100). Based on revised data, this index declined 0.4 percent in March and declined 0.2 percent in February. During the six-month period through April, the leading index increased 0.1 percent, and four of the seven components increased (diffusion index, six-month span equals 57.1 percent).

COINCIDENT INDICATORS. Two of the four components in the coincident index increased in April. The increases — from the larger positive contributor to the smaller — occurred in employed persons and household gross disposable income*. Retail trade and industrial production* declined in April.

With the increase of 0.1 percent in April, the coincident index now stands at 144.6 (1990=100). Based on revised data, this index remained unchanged in March and increased 0.1 percent in February. During the six-month period through April, the coincident index increased 0.5 percent, with one component in the series making a positive contribution (diffusion index, six-month span equals 25.0 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 June 23, 2008. Some series are estimated as noted below.

NOTES: Series in the leading index that are based on The Conference Board estimates are sales to inventory ratio and gross operating surplus for private non-financial corporations, the implicit price index used to deflate rural goods exports and building approvals, and the CPI used to deflate money supply M3. Series in the coincident index that are based on The Conference Board estimates are industrial production and household disposable income. CPI was used to deflate retail trade.

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

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