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MA and NH lead in economic growth

New England’s economy grew in the first quarter of 2010, outpacing the mid-west and southeastern regions. Massachusetts and New Hampshire led the region, among just four states nationally with growth in excess of 1.0% for the period.

The State Coincident Index

The Federal Reserve Bank of Philadelphia produces a monthly coincident index for each of the 50 states. (http://www.philadelphiafed.org/research-and-data/regional-economy/indexes/coincident/)

Every month, the Philadelphia Fed publishes the Business Outlook Survey (“BOS”), which solicits the views of local manufacturers about conditions at their companies. This survey, which has been conducted continuously since May 1968, provides a unique early view of U.S. economic activity each month. Consequently, economists, the media, and investors carefully watch the survey, and the survey is widely believed to have an influential impact on the stock market.

The State Coincident Indexes combines four state-level indicators to summarize current economic conditions in a single statistic which indicates growth (or decline) over a three-month period: (1) nonfarm payroll employment; (2) average hours worked in manufacturing; (3) the unemployment rate; and, (4) wage and salary disbursements deflated by the consumer price index. 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.

DATA SOURCES

Index: The Federal Reserve Bank of Philadelphia (http://www.philadelphiafed.org/research-and-data/regional-economy/indexes/coincident/)

Nonfarm payroll employment, the unemployment rate, average hours worked in manufacturing, and the consumer price index can be obtained from the Bureau of Labor Statistics.

Wages and salary disbursements (a component of personal income) and gross domestic product by state can be obtained from the Bureau of Economic Analysis.

Historical maps of the state coincident indexes from January 2005 are also available.