Jason Bram and James Orr
The February Indexes of Coincident Economic Indicators (CEIs) for New York State, New York City, and New Jersey released today show activity expanding at a moderate pace across the region. Like those for January, the February CEIs incorporate the annual benchmark employment revisions for 2011 and 2012, and reveal that the economies of the region did not go off track as a result of the disruptions caused by Superstorm Sandy. (A recent blog post explores the employment effects of Sandy in the New York City metropolitan area.)
The CEIs reported here are single composite measures designed to provide a monthly reading of economic activity. They are constructed from four data series: payroll employment, the unemployment rate, average weekly hours worked in manufacturing, and real (inflation-adjusted) earnings. Details of the construction of the CEIs can be found in a 1999 article in the Federal Reserve Bank of New York series Current Issues in Economics and Finance; a more recent article in the series illustrates how the CEIs are used to analyze regional economic trends.
The CEIs indicate that economic growth across the region was running at a 2‑3 percent annual rate in February and has generally been fairly robust over the past few months. In New York State, activity bottomed out at the end of 2009 and since then has been expanding moderately. Following a strong gain in January, growth was more subdued in February. The current level of activity in the state is still about 3 percent below its pre-recession (2008) peak.
The index for New York City shows that the recovery of activity also began in late 2009. The city’s recovery has been quite strong, with activity growing at a sustained annual pace of 4.5 percent in 2011 and close to 4 percent in 2012. The indexes released today show that activity has decelerated to a pace of just under 3 percent in recent months. Still, the city’s economy remains on a reasonably sturdy growth track: recovery has been considerably quicker and stronger than after the 1990 and 2001 downturns. The level of activity is now estimated to be well above its pre-recession peak.
The index for New Jersey shows that the recovery in the state took a while to gain traction, though it now appears to have kicked into a somewhat higher gear. After slowing in mid-2012, economic growth has picked up to an estimated annualized rate of 3 percent over the past six months. Activity in the state is now up more than 2 percent over the past twelve months—the strongest year-over-year growth in the state since 2005. Nevertheless, with New Jersey’s economy still an estimated 4 percent below its pre-recession (2008) peak, sustained growth in activity will be needed for some time before the state fully recovers.
All in all, February’s report points to moderate, sustained growth in economic activity across the region. Updates to the regional CEIs are provided on a monthly basis.
The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.
Jason Bram is a senior economist in the New York Fed’s Research and Statistics Group.
James Orr is a vice president in the New York Fed’s Research and Statistics Group.