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Economy in Brief

State Coincident Indexes
by Charles Steindel  November 27, 2018

The Philadelphia Federal Reserve Bank's estimates of state coincident activity in October is in line with other state-level indicators showing a convergence of growth across the nation. The 12-month growth in the indexes lay between 2.5% and 4.5% for 31 states; the outliers (mainly on the low side) did not include any remarkably large states. A number of smaller energy-producing intensive states, such as Kentucky, West Virginia, North Dakota, and Louisiana were in the low group. No state reports a loss. Hawaii, which has the lowest unemployment rate in the nation, registered the smallest gain in activity. New Mexico appears to be the fastest-growing state over the last year, with a remarkable 6.4% increase in its activity index.

The more recent figures are, as is typical for a data set such as this, more scattered. Alaska and Oklahoma report gains above 1.5%, while 6 states have seen declines. Still, the geographic pattern of large gains and losses was diffuse: it's not longer clearly the case that the West is growing noticeably more rapidly than other regions. Weakness in Hawaii—one of the states down the last three months--and recent gains in Alaska (the state with the highest unemployment rate, but also the highest rate of growth in activity recently) exemplify the ongoing convergence. The pattern of monthly changes from September to October was comparable to that for the last three months.

One complication is that these indexes are benchmarked to the trend in a state's real GDP growth. The series have not, it appears, been updated to reflect the recent revision in the state GDP dataset. Such an adjustment may modify the general tenor of the results, and surely will change all the numbers.

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