Archive for the ‘U,S, Economy’ category

Some Thankfull Job Growth Numbers

November 20, 2012

The U.S. Bureau of Labor Statistics released its monthly report on state and local employment today and the good news is that, preliminarily,  New Hampshire added 1,000 jobs in October.  The bad news is that this is just 1,200 more jobs than the state had one year earlier in October of 2011.  For optimists,  the most recent trend is likely to be the most important and the monthly report is consistent with the rise in PolEcon’s NH Leading  Index.

Nevertheless, the longer-term job growth trend in NH has been weak.  Looking at growth in just private sector employment, the situation is no better for NH.   As I have noted here, I  believe job growth in NH is being underestimated but even if that is true, it is hard to see how the recent past will be revised enough to make NH’s job growth picture look comparable to that of our neighbor to the south or the U.S. as a whole.

State-by-State Economic Outlook for the Next Six Months

October 19, 2012

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.

What Does the “Misery Index” Say About Election Results?

October 16, 2012

I am not a political analyst and this is not a political blog.  The polemics of political discourse are as tedious to me as the graphs I use with two Y axes are no doubt tedious to politicos. If you are prone to apoplexy or unable to view any data or information without an ideological lens, stop reading now.

Since Ronald Reagan closed a presidential debate with Jimmy Carter by asking “are you better of today than you were four years ago” that question has been a benchmark in every presidential election and with good reason because  the answer to the question is a pretty good predictor of election results.  But how do you operationally define “better off”?    The sum of the unemployment rate and the inflation rate is  referred to as the “misery index”, since a high reading on either one or both of the components would likely have a negative impact on household sentiment.  When the misery index is lower in an election year than it was in the previous presidential election, the party in power typically retains the presidency,  and when the misery index is higher, the presidency typically changes parties.  The chart below highlights the relationship.  The chart line shows the value of the “misery index” in the 3rd quarter of each year (just before the election) and each circular marker indicates a presidential election year.  The shaded markers indicate a change in control of the party in the White House.

With the exception of the 2000 election of George W.  Bush over Al Gore, when the misery index was lower in an election year than it was in the prior presidential election year, the party in power retains the White House and when the misery index is higher,  party control of the White House changes.   The chart suggests that the 2012 election should be close, but probably leans toward President Obama’s reelection.  Looking at the individual misery indices in  swing states also gives The President a slight edge.

The misery index doesn’t say much about NH’s gubernatorial election however.   The chart below shows that declines in the misery index (compared to 2 years earlier during the prior election for governor) do not appear to be associated with changes in party control of the governorship in the state.  The chart does does show that a change is more likely to occur in a year in which the gubernatorial election coincides with the presidential election.

Overall, however, the chart suggests that NH voters do not hold gubernatorial candidates responsible for weaker economic conditions nor are they likely to credit them for good economic performance.  Rather, they make their choices based on the perceived qualities of candidates.  Isn’t that refreshing?


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