Thursday, December 6, 2012

Philly Fed: Growth in coincident index for Colorado exceeds national growth

The Coincident Index for Colorado rose 1.1 percent over three months from July to October this year, which was above the national index's increase of 0.6 percent. October'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 (1.1%) than in most states. 

According to the October 2012 report:


The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for October 2012.  In the past  month, the indexes increased in 41 states, decreased in four states, and remained stable in five states, for a one-month  diffusion index of 74. Over the past three months, the indexes increased in 39 states, decreased in six states, and remained  stable in five states, for a three-month diffusion index of 66. 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 October 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 during October. 



The second graph shows year-over-year changes in the index, and an upward trend was evident through most of 2011. The growth rate has moderated in recent months,  but has been keeping up with recent national growth rates, for the most part. 



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.