State-by-State Economic Outlook for the Next Six Months
The Philadelphia Region Federal Reserve Bank is producing a leading economic index for each state. The index contains the same economic variables for each state so it is not customized to the specifics of each state’s economy. Some of the index variables are national (similar to my “PolEcon NH Leading Index”) but all of the key economic indicators included yield important information about the likely direction of any state’s economy. The graph below from the Philly Fed suggests that NH, along with VT and CT, will lag the region and much of the country in economic growth over the coming months.
The Philly Fed index isn’t designed to predict just job growth like PolEcon’s (my) NH leading index, but the two indices move in similar ways with changes in the NH economy. I’ve test the ability of both to accurately forecast near-term (6 month) job growth and the PolEcon index does a significantly better job. But the PolEcon Index was modeled and fit specifically to NH data, testing a number of economic variables that have the strongest relationship to NH’s near-term job growth. Doing that for 50 states might be prohibitive, especially for an institution (The Philly Fed.) that primarily serves one economic region of the country. I like the Philly Fed index because and it is great to have a readily available (read free), state-by-state, near-term, economic outlook from a respected and unbiased source. I like it even more when it agrees with the PolEcon Index, as it does now.