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Home > Research & Data > Regional Economy > Third District Leading Indexes

Third District Leading Indexes

The Federal Reserve Bank of Philadelphia produces leading indexes for each state in the Third District: Pennsylvania, New Jersey, and Delaware. The indexes are calculated monthly and are usually released a week after the release of the coincident indexes. The Bank issues a release each month describing the current and future economic situation for the Third District states.

The leading index for each state predicts the nine-month growth rate of the state’s coincident index. In addition to the coincident index, the models include other variables that lead the economy: state-level housing permits (1 to 4 units), state initial unemployment insurance claims, delivery times from the Philadelphia Fed’s Business Outlook Survey, and the interest rate spread between the 10-year Treasury bond and the fed funds rate.

A time-series model (vector autoregression) is used to construct the leading index. Current and prior values of the forecast variables are used to determine the future values of the index.

Data Sources

Delivery times from the Philadelphia Fed’s Business Outlook Survey can be found on the survey’s historical data page.

Housing permits can be obtained from the U.S. Census Bureau.

Initial unemployment insurance claims can be obtained from the Department of Labor.

Interest rates for the 10-year Treasury bond and the Fed funds rate can be obtained from the Board of Governors.

Reference

Crone, Theodore M. "A New Look at Economic Indexes for the States in the Third District," Business Review, Federal Reserve Bank of Philadelphia (November/December 2000).