Wednesday, October 24, 2012

Philly Fed: Colorado coincident index slightly below national index for 8th month


The Coincident Index for Colorado rose 0.7 percent over three months from June to September this year, which was above the national index's increase of 0.6. September's index, which was released today by the Philadelphia Federal Reserve Bank, is an index calculated from nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average).

The three-month change in the index, shown in the map here, was larger in Colorado (0.7%) than in most states. 

According to the September 2012 report:

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for September 2012.  In the past month, the indexes increased in 39 states, decreased in five states, and remained stable in six states, for a one-month diffusion index of 68. Over the past three months, the indexes increased in 37 states, decreased in 11 states, and remained stable in two states,

The graph below compares the 3-month change in both the Colorado Index and the US index. After five months of lagging the nation in the 3-month change, Colorado moved above the national growth rate in September 2012. 


The second graph shows year-over-year changes in the index, and an upward trend was evident through most of 2011, but now shows signs of falling below national growth rates. The Colorado index has been slightly below the national index for the past eight months. 


Overall, this report suggests some slowing in Colorado economic activity in relation to the nation as a whole, but by a small amount. Nevertheless, the overall trend is one of mild growth.

The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.