Thursday, October 31, 2013

Philly Fed: Colorado growth outpaces US growth in August

The Coincident Index for Colorado rose 0.9 percent over three months from May through August this year, which was above the national index's increase of 0.7 percent. August's index, which was released last month 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 (1.0%) than about 25 states, and generally speaking, Colorado was about the the middle of the pack when looking at growth rates among states. 

According to the August 2013 report:
The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for August 2013. In the past  month, the indexes increased in 40 states, decreased in five states, and remained stable in five, for a one-month diffusion  index of 70. Over the past three months, the indexes increased in 42 states, decreased in six, and remained stable in two, for  a three-month diffusion index of 72. 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 August and 0.7 percent over the past three months. 

The graph below compares the 3-month change in both the Colorado Index and the US index. Colorado's growth has generally been above national growth in this index since mid-2012. 



The second graph shows year-over-year changes in the index, and an upward trend has been evident in both the US and in Colorado since 2011. Colorado's year-over-year growth has exceeded the nation's growth rate since 2012. The YOY change in the coincident index in Colorado was 4.1 percent. Nationwide, it was 2.8 percent. 

The gap between US and Colorado growth rates grew during much of 2012 but appears to have moderated during 2013. 



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.