The Philadelphia Federal Reserve release their September Coincidence Index Report today. Minnesota is showing positive improvement. I am not entirely sure how this will translate into future growth for employment in Minnesota, as this Index is new to me. It was described to me by an economist as “some bored economist invented this index..”.
This Index is supposed to trend our GDP, which should then translate to into JOBS, which should translate into helping out the Real Estate market. I am not sure what kind of lag time is involved, but if this Index is accurate then we should see job improvement. This one is new to me, so I am not going to put a lot of trust into this yet – just thought we should keep an eye on it to see if this may be an early indicator.
The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.
- Economic Report: Leading U.S index points to slower growth (marketwatch.com)
- Economic Report: Philly Fed index recovers in October (marketwatch.com)
- Jon Markman’s Speculations: Who’s right about recession: Wall Street or ECRI? (marketwatch.com)