Given the sudden, extreme impact of the COVID-19 outbreak on initial unemployment claims in recent weeks, our researchers’ standard approach for estimating the six-month change in coincident indexes is not appropriate. Therefore, the Philadelphia Fed has suspended the release of the state leading indexes indefinitely.
State Leading Indexes
The Federal Reserve Bank of Philadelphia produces leading indexes for each of the 50 states. 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 of the 50 states with special coverage of the Third District: Pennsylvania, New Jersey, and Delaware.
The leading index for each state predicts the six-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 Institute for Supply Management (ISM) manufacturing survey, and the interest rate spread between the 10-year Treasury bond and the 3-month Treasury bill.
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.
Last updated: April 14, 2020, 10:00 AM EST
Data Sources & Additional Information
Delivery times from the ISM Manufacturing Survey can be obtained from the Institute for Supply Management.
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 three-month Treasury bill can be obtained from the Board of Governors.
Errata: Shows corrections to the historical data (Last update: May 23, 2018)
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).