Browsing Posts tagged Federal Reserve Bank of Philadelphia

Leading Indicators vs April 2015 – Easynomics Court

For an explanation on “Easynomics Court” and how it works, read this page on leading indicators vs six months into the future.

NOTE: In case you are accessing this post long after it was originally posted, you may also be interested in the most recent Easynomics Court case.

As of today, the official Easynomics Court conviction record for categorizing the growth level six months into the future is:

  • 18 – Guilty (Win)
  • 11 – Not Guilty (Loss)
  • Conviction Rate = 62 percent

NOTE: A random guess would yield the correct result only 33 percent of the time, so the leading indicators are definitely worth noting.


Leading Indicators from October 2014

Charges Filed: “The Leading Indicators hereby charge that April 2015 shall be a POSITIVE month, as indicated by a positive annualized growth rate at or faster than the historical average of 3.3 percent.”

Exhibit A – Industrial Production | NEUTRAL

In the six months leading up to October 2014, Industrial Production rose at an annualized rate of about 3.26 percent. This is consistent with growth that is positive but below historically average rates over the next six months or so.

Easy Description: Industrial production (manufacturing, mining and utilities) is an excellent leading indicator for the broader economy.

Easynomics Rating Methodology: I will calculate the change in the Industrial Production Index over the six months leading up to the month the “charges” are being filed. I will convert that change into an annualized rate. If the annualized rate is less than zero, I will issue a “negative” rating – 3.3 percent or higher will be “positive” – anything in between will be “neutral.”

NOTE: I thought I would use Residential Investment here in Exhibit A but then realized that I’d have to wait until the end of each quarter before being able to use it! (silly me)

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Leading Indicators vs March 2015 – Easynomics Court

For an explanation on “Easynomics Court” and how it works, read this page on leading indicators vs six months into the future.

NOTE: In case you are accessing this post long after it was originally posted, you may also be interested in the most recent Easynomics Court case.

As of today, the official Easynomics Court conviction record for categorizing the growth level six months into the future is:

  • 18 – Guilty (Win)
  • 10 – Not Guilty (Loss)
  • Conviction Rate = 64 percent

NOTE: A random guess would yield the correct result only 33 percent of the time, so the leading indicators are definitely worth noting.


Leading Indicators from September 2014

Charges Filed: “The Leading Indicators hereby charge that March 2015 shall be a POSITIVE month, as indicated by a positive annualized growth rate at or faster than the historical average of 3.3 percent.”

Exhibit A – Real Private Residential Fixed Investment | POSITIVE

In the six months leading up to September 2014, Real Private Residential Fixed Investment rose at an annualized rate of about 5.7 percent. This is consistent with growth that is at or above historically average rates over the next six months or so.

Easy Description: Residential investment (money that people spend on buying homes, home improvements and money people make on the sale of homes) is an excellent leading indicator for the broader economy. Think about it – after a home is bought, there are so many other expenditures that typically come with it: furniture, utilities, etc.

Easynomics Rating Methodology: I will calculate the change in “real private residential fixed investment” over the six months leading up to the month the “charges” are being filed. I will convert that change into an annualized rate. If the annualized rate is less than zero, I will issue a “negative” rating – 3.3 percent or higher will be “positive” – anything in between will be “neutral.” NOTE: This data is released only on a quarterly basis, so in order to use it on a monthly basis, I will assume that growth was linear during the quarter and use the appropriate estimate for the month I need.

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State By State Economy – Philadelphia Fed Index for Every U.S. State (thru September 2014)

A state by state economy analysis is provided by the Federal Reserve Bank of Philadelphia each month. How’s your state doing? I’d love to hear about it in the comments section.

NOTE: You may be reading an outdated analysis.  Please visit my latest state by state economy analysis for more info.

On this site, I share a lot of indices that tell us how things are going in the country – for example, my weekly economic indicators roundup. But what each of you feels is much more related to what’s happening in your specific state. Wouldn’t it be great if there were an economic index we could follow that tracked exactly that?

Fortunately, that’s what the Federal Reserve Bank of Philadelphia does on a monthly basis, providing us a look at the state by state economy. They produce a “Coincident State Index” that combines several different economic factors into one number. This basically tracks the current rate of GDP (measure of all economic output) growth (or contraction if it’s negative) for the state. The other index is a “Leading State Index” that combines several different leading indicators to predict the annualized pace at which the Coincident State Index will be growing over the next six months.

Philadelphia Fed State Coincident Indexes

Look at the chart below to see how fast each state’s GDP is growing right now. It’s color-coded, so the green colors mean the state’s economy is growing (the darker the better), and the red colors mean the state’s economy is shrinking (the darker the worse). Blue indicates essentially no change.

State By State Economy - Philadelphia Fed State Coincident Indexes September 2014

Source: PhiladelphiaFed.org

Philadelphia Fed State Leading Indexes

Look at the chart below to see how fast each state’s Coincident Index is expected to grow over the next six months. This is NOT actually an annualized growth rate over the next 6 months, which means you should roughly double it to estimate what its annual growth rate would be. It’s color-coded, so blue is the best, and the green colors mean the state’s economy is expected to grow (the darker the better), and the red colors mean the state’s economy is expected to shrink (the darker the worse). continue reading…

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Leading Indicators vs February 2015 – Easynomics Court

For an explanation on “Easynomics Court” and how it works, read this page on leading indicators vs six months into the future.

NOTE: In case you are accessing this post long after it was originally posted, you may also be interested in the most recent Easynomics Court case.

As of today, the official Easynomics Court conviction record for categorizing the growth level six months into the future is:

  • 17 – Guilty (Win)
  • 10 – Not Guilty (Loss)
  • Conviction Rate = 63 percent

NOTE: A random guess would yield the correct result only 33 percent of the time, so the leading indicators are definitely worth noting.


Leading Indicators from August 2014

Charges Filed: “The Leading Indicators hereby charge that February 2015 shall be a POSITIVE month, as indicated by a positive annualized growth rate at or faster than the historical average of 3.3 percent.”

Exhibit A – e-Forecasting Leading Economic Indicator (eLEI) | POSITIVE

In the six months leading up to August 2014, the e-Forecasting eLEI rose at an annualized rate of about 7.2 percent. This is consistent with growth that is at or above historically average rates over the next six months or so.

Easy Description: e-Forecasting.com has many useful tools for tracking the economy. Their Leading Economic Indicator (eLEI) is a proprietary model to predict the direction of the economy several months in advance. The concept is similar to The Conference Board’s LEI does. Many people believe this is a good leading indicator for the economy, and there is some very good work that validates that.

Easynomics Rating Methodology: I will calculate the change in the eLEI over the six months leading up to the month the “charges” are being filed. I will convert that change into an annualized rate. If the annualized rate is less than zero, I will issue a “negative” rating – 3.3 percent or higher will be “positive” – anything in between will be “neutral.” NOTE: I will use the first available data for the month where possible – i.e., I won’t use revised data – this way, I’m simulating what the leading indicators really believe at the time they are released.

continue reading…

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Leading Indicators vs January 2015 – Easynomics Court

For an explanation on “Easynomics Court” and how it works, read this page on leading indicators vs six months into the future.

NOTE: In case you are accessing this post long after it was originally posted, you may also be interested in the most recent Easynomics Court case.

As of today, the official Easynomics Court conviction record for categorizing the growth level six months into the future is:

  • 16 – Guilty (Win)
  • 10 – Not Guilty (Loss)
  • Conviction Rate = 62 percent

NOTE: A random guess would yield the correct result only 33 percent of the time, so the leading indicators are definitely worth noting.


Leading Indicators from July 2014

Charges Filed: “The Leading Indicators hereby charge that January 2015 shall be a POSITIVE month, as indicated by a positive annualized growth rate at or faster than the historical average of 3.3 percent.”

Exhibit A – e-Forecasting Leading Economic Indicator (eLEI) | POSITIVE

In the six months leading up to July 2014, the e-Forecasting eLEI rose at an annualized rate of about 3.6 percent.  This is consistent with growth that is at or above historically average rates over the next six months or so.

Easy Description: e-Forecasting.com has many useful tools for tracking the economy.  Their Leading Economic Indicator (eLEI) is a proprietary model to predict the direction of the economy several months in advance.  The concept is similar to The Conference Board’s LEI does.  Many people believe this is a good leading indicator for the economy, and there is some very good work that validates that.

Easynomics Rating Methodology: I will calculate the change in the eLEI over the six months leading up to the month the “charges” are being filed.  I will convert that change into an annualized rate.  If the annualized rate is less than zero, I will issue a “negative” rating – 3.3 percent or higher will be “positive” – anything in between will be “neutral.”  NOTE: I will use the first available data for the month where possible – i.e., I won’t use revised data – this way, I’m simulating what the leading indicators really believe at the time they are released.

continue reading…

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State By State Economy – Philadelphia Fed Index for Every U.S. State (thru July 2014)

A state by state economy analysis is provided by the Federal Reserve Bank of Philadelphia each month. How’s your state doing? I’d love to hear about it in the comments section.

NOTE: You may be reading an outdated analysis.  Please visit my latest state by state economy analysis for more info.

On this site, I share a lot of indices that tell us how things are going in the country – for example, my weekly economic indicators roundup. But what each of you feels is much more related to what’s happening in your specific state. Wouldn’t it be great if there were an economic index we could follow that tracked exactly that?

Fortunately, that’s what the Federal Reserve Bank of Philadelphia does on a monthly basis, providing us a look at the state by state economy. They produce a “Coincident State Index” that combines several different economic factors into one number. This basically tracks the current rate of GDP (measure of all economic output) growth (or contraction if it’s negative) for the state. The other index is a “Leading State Index” that combines several different leading indicators to predict the annualized pace at which the Coincident State Index will be growing over the next six months.

Philadelphia Fed State Coincident Indexes

Look at the chart below to see how fast each state’s GDP is growing right now. It’s color-coded, so the green colors mean the state’s economy is growing (the darker the better), and the red colors mean the state’s economy is shrinking (the darker the worse). Blue indicates essentially no change.

State By State Economy - Philadelphia Fed State Coincident Indexes July 2014

Source: PhiladelphiaFed.org

Philadelphia Fed State Leading Indexes

Look at the chart below to see how fast each state’s Coincident Index is expected to grow over the next six months. This is NOT actually an annualized growth rate over the next 6 months, which means you should roughly double it to estimate what its annual growth rate would be. It’s color-coded, so blue is the best, and the green colors mean the state’s economy is expected to grow (the darker the better), and the red colors mean the state’s economy is expected to shrink (the darker the worse). continue reading…

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