The Sun Will Come Out Tommorow
I have been uncharacteristically and uncomfortably gloomy in my assessment of the NH economy lately, but I still hold out hope that New Hampshire’s job growth numbers for 2012 will be revised upward early in 2013 based on the volume of help-wanted advertising in the state and reported growth in aggregate wage and salary income in the state. Even if that doesn’t happen there are encouraging signs that job growth will accelerate. PolEcon’s NH Leading Index increased this month to a value of 13.0, down slightly from 16.7 the prior month, but it has registered its highest three-month reading since early in 2010. At least some uncertainty around the “fiscal cliff” that caused many firms to postpone hiring has been removed. The U.S. Treasury debt ceiling still needs to be raised this month and a repeat of the last debt ceiling antics could produce another big drop in business and financial market confidence, but overall, the national and NH economies appear poised to see accelerating job growth as 2013 progresses.
PolEcon’s NH Index of Leading Indicators is a diffusion index consisting of nine state and national indicators of economic activity designed to predict changes in the rate of employment growth in NH. When index scores are above zero, more of the leading indicators are moving in a positive direction and the NH economy is expanding. The Index has a strong statistical relationship with changes in NH employment, Index scores lead changes in the rate of NH employment growth by 3-6 months. Using statistical techniques, Index scores can also be converted into a probability that NH will be in a recession sometime within the subsequent six months.