For the month of August, the unemployment rates for Pennsylvania, New Jersey, and Delaware were 9.2 percent, 9.6 percent, and 8.4 percent, respectively, and the national unemployment rate was 9.6 percent. Using national unemployment and other regional data, we predict the September unemployment rates for the three states in our District to be 9.2 percent for Pennsylvania, 9.6 percent for New Jersey, and 8.4 percent for Delaware with 90 percent confidence intervals of [9.1,9.4], [9.5,9.7], and [8.3,8.5], respectively.1
Although the national unemployment rate for a given month is usually reported on the first Monday of the following month, state unemployment rates are not released until roughly three weeks later. For example, the data on the national unemployment rate for September 2010 were reported on Friday, October 8, 2010, but the state unemployment rate data for the same month will not be reported until Friday, October 22, 2010. Because of this lag in the release of state-level data for a given month, it would be desirable to produce a nowcast — which is what economists call a “forecast” or estimate of economic activity that has already occurred — of the state unemployment rates in advance of the actual report.