State Coincident Indexes

The Philadelphia Federal Reserve has released updated estimates of coincident indexes by state. The coincident indexes are computed from a dynamic factor model relating a number of other monthly variables (primarily from the labor market) available at the state level. The derived indexes are transformed to have a trend comparable to that of a state’s real GDP. With this release, the levels of the indexes are now presented in the form that their average value for 2007 is equal to 100. While the Philly measures provide only a broad-brush idea of developments in a state’s economy, the common construction allows one to get a better sense of how a state is doing relative to others.

The April numbers show increases in activity in virtually all the nation. The comparable national measure was 2.8% higher than a year earlier. Michigan was the only state to show a decline over the last 12 months, but the gains in West Virginia and Arkansas were less than one-half percent. California was the fastest-growing state, with its index up 4.7%. A number of other states also reported gains of 4 percent or higher, perhaps most importantly (for its national weight, Texas). Still, a full 35 states reported increases between 1.9% (Louisiana) and 3.9% (Florida).

The write-up for the release of the data emphasizes growth over the last three months. There too, there appears to be reasonably widespread growth. Maryland was the only state where April’s level of activity was said to be below January’s. 8 states saw gains between .1% and .6%; 11 reported growth in excess of 1.0%, while 30 were in the .6% to 1.0% range. Of the 4 largest states, Texas saw growth above 1.0%, while California, New York, and Florida were all in that .6% to 1.0% area (though California’s increase, from the data issued by the Bank, appears to have been 1.04%!).