Dispersion in State Economic Health Continues to Grow

June 29, 2015

This week we look at look at the State Economic Indexes recently released by the Federal Reserve Bank of Philadelphia and in the Map of the Week, highlight the predictable, but remarkable change in drought conditions in Texas.

According to the Philly Fed, Dispersion of State’s Economic Health Continues to Increase

Last week the Federal Reserve Bank of Philadelphia released updates to several datasets which seek to measure the economic health of State economies:  State Coincident Indexes and State Leading Indexes.


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The State Coincident Indexes show positive growth for 37 states.  The fastest growing state is Indiana.  The New England States of Rhode Island, Connecticut, Massachusetts and New Hampshire are also showing strong growth.  Interestingly, the Philly Fed data shows Montana as a strong performer. This is curious, because other energy exposed states (WV, AK, OK) were among the worst performers.

Despite Montana’s exposure to the energy sector, its employment market has remained healthy.


As we discussed in a previous Commentary, an aspect of the Coincident Index data that we believe is important to monitor is the wide dispersion of the rates of growth across the States.  In May the difference between the worst performer (WV -.37%) and the best performer (IN +.62%) was over a full percentage point.


The difference between the bottom quintile (+.03%) and the top quintile (+.62%) in May was .59%.


This spread has been growing since January (.36%).  Graphing the spread (dark blue line minus the light blue line) shows that it is now at its widest since the August ’09.  A wider spread indicates a larger dispersion amongst the States.

Map of the Week: Texas Drought Intensity



Source:  National Drought Mitigation Center, DIVER Analytics-Map Module


Have a great week,

 Michael Craft, CFA

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