Monday, December 31, 2012

Philly Fed: Coincident index growth in Colorado outpaces nation in November

The Coincident Index for Colorado rose 1.3 percent over three months from August to November this year, which was above the national index's increase of 0.6 percent. November's index, which was released last week 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 (1.3%) than in most states. 

According to the November 2012 report:

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for November 2012.  In the  past month, the indexes increased in 45 states and decreased in five states, for a one-month diffusion index of 80. Over the  past three months, the indexes increased in 45 states, decreased in three, and remained stable in two, for a three-month  diffusion index of 84. For comparison purposes, the Philadelphia Fed has also developed a similar coincident index for the 
entire United States. The Philadelphia Fed’s U.S. index rose 0.2 percent in November and 0.6 percent over the past three months.
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 and remained above the national rate through November. 



The second graph shows year-over-year changes in the index, and an upward trend was evident through most of 2011. The Colorado index now appears to be outpacing the national index. 



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.