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Benchmark Revisions - May 2008

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Released: Monday, December 17, 2007

The Conference Board announced today that the leading index for Mexico increased 1.3 percent and the coincident index increased 0.3 percent in October.

  • The leading index increased sharply again in October, and the gain was concentrated in oil prices, real exchange rate, and stock prices. With this month's increase, the growth rate of the leading index continued to pick up, and the leading index grew 4.8 percent (a 9.8 percent annual rate) from April to October, well above the 1.0 to 2.1 percent decline in the beginning of this year (about a -3.0 to -4.0 percent annual rate).
  • The coincident index increased slightly in October, but September's small increase was revised down to a small decline as actual data for industrial production and retail sales became available. The strength in this index of current economic activity has been widespread in recent months despite weakness in all components except employment in the last two months.
  • The leading index has been on a somewhat volatile but rising trend since February, and the strengths among the leading indicators have been widespread in recent months. At the same time, real GDP growth picked up to a 5.9 percent annual rate in the third quarter of 2007, up from the 3.4 percent average annual rate in the first half of 2007. Despite short-term volatility, the recent behavior in both the leading and coincident indexes so far suggests that the economy should continue growing at a moderate to strong pace in the near term.

LEADING INDICATORS. Four of the six components that make up the leading index increased in October. The positive contributors to the index — from the largest positive contributor to the smallest one — are the US refiners' acquisition cost of domestic and imported crude oil, the (inverted) real exchange rate, stock prices, and net insufficient inventories. The industrial production construction component* and the (inverted) federal funds rate remained unchanged.

With the 1.3 percent increase in October, the leading index now stands at 168.9 (1990=100). Based on revised data, this index increased 0.8 percent in September and declined 0.1 percent in August. During the six-month span through October, the index increased 4.8 percent, with five of the six components increasing (diffusion index, six-month span equals 83.3 percent).

COINCIDENT INDICATORS. Only one of the four components that make up the coincident index increased in October. The positive contributor was number of people employed (measured by IMSS beneficiaries)*. Industrial production and retail sales* declined, while the (inverted) unemployment rate remained unchanged in October.

With the increase of 0.3 percent in October, the coincident index now stands at 119.7 (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 span through October, the index increased 1.2 percent, with three of the four components increasing (diffusion index, six-month span equals 87.5 percent).

DATA AVAILABILITY. The data series used to compute the two composite indexes reported in the tables in this release are those available "as of" 10 A.M. December 13, 2007. Some series are estimated as noted below.

NOTES: Series in the leading index based on The Conference Board estimates include industrial production — construction component. The series in the coincident index based on The Conference Board estimates include industrial production and retail sales.

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

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