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Global Business Cycle Indicators


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Benchmark Revisions - January 2008

Press Release Archive

Released: Monday, July 28, 2008

The Conference Board announced today that the leading index for Australia declined 0.1 percent and the coincident index declined 0.1 percent in May.

  • The leading index declined slightly in May, the fourth decrease in the index in the past five months. The yield spread, building approvals and money supply contributed negatively to the index this month, more than offsetting gains in rural goods exports and share prices. The six-month change in the index has fallen to -0.7 percent (a -1.4 percent annual rate), down sharply from 2.8 percent (a 5.7 percent annual rate) from May to November 2007. In addition, the strengths among the leading indicators have continued to be only slightly more widespread than the weaknesses in recent months.
  • The coincident index declined for the first time in eight months, driven by a large drop in employment in May. Since November, the coincident index has risen 0.6 percent (a 1.3 percent annual rate), well below the increase of 1.3 percent (a 2.5 percent annual rate) that prevailed between May to November 2007, while the strengths and weaknesses among the coincident indicators have remained balanced in recent months.
  • The leading index has declined moderately so far in 2008, after increasing steadily since mid-2007. Meanwhile, the coincident index has continued to increase this year, albeit at a slower rate. Real GDP expanded at an average annual rate of 2.6 percent during the first quarter of 2008 and the final quarter of 2007, well below the 4.7 percent average annual rate of growth for the previous two quarters. Taken together, the recent behavior of the composite indexes continues to suggest a moderation in economic activity in the near term.

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

With the 0.1 percent decrease in May, the leading index now stands at 184.9 (1990=100). Based on revised data, this index increased 0.3 percent in April and declined 0.4 percent in March. During the six-month period through May, the leading index decreased 0.7 percent, and three of the seven components increased (diffusion index, six-month span equals 57.1 percent).

COINCIDENT INDICATORS. Three of the four components in the coincident index increased in May. The increases — in order from the largest positive contributor to the smallest — occurred in retail trade, household gross disposable income*, and industrial production*. Employed persons declined in May.

With the decrease of 0.1 percent in May, the coincident index now stands at 145.1 (1990=100). Based on revised data, this index increased 0.2 percent in April and remained unchanged in March. During the six-month period through May, the coincident index increased 0.6 percent, with two components in the series making positive contributions (diffusion index, six-month span equals 50.0 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 July 24, 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.