From Builder, Leyva-Leon, with The Sims, “Tracking state-level economic conditions every week”:
Most of the research in this document focuses on the measurement of cyclical changes in actual activities at the national level. Much less attention has been paid to corresponding measures at the national level. The only thing we know is the monthly synchronization index of Crone and Clayton-Matthews (2005) of the 50 states in the United States, reviewed by Chinn and LeCloux (2018) and regularly updated by the Federal Reserve Bank of Philadelphia. These state-level economic activity indicators are based on a small data series designed to capture labor market dynamics. 2
One of the contributions of our paper is to extend recent efforts to measure weekly economic conditions to the state level. To this end, we assembled a diverse state-level database that combines new high-frequency data (such as credit and debit card spending, business applications, and mobile indices) with more traditional low-frequency indicators (such as employment and income) Combine. Specifically, we include weekly, monthly, and quarterly data series covering different aspects of the state economy, such as labor market indicators, household expenditures, real economic activity, liquidity indicators, financial indicators, and expected indicators. 3 Recently, Bokun, Jackson, Kliesen, and Owyang (2020) compiled a real-time data set for US states, which contains monthly and quarterly variables, but no weekly variables. Another feature of our dataset that differs from theirs is that they focus on the sectoral breakdown of employment and output data, while we include various non-standard variables (for example, power consumption, vehicle mileage, number of oil rigs, coal, and Oil production) to capture the specific characteristics of each state and obtain a more comprehensive measurement of the economic conditions of each state in the United States.
We use the state-level economic status indicators derived from this to study the similarities and differences in the length, depth, and timing of the business cycles of various states, with particular attention to the four recent recessions from 1987 to 2021. 4 We show that during the economic slowdown and the Great Recession in the early 2000s, there was considerable cross-state heterogeneity in all three standards, and the COVID-19 downturn occurred almost simultaneously in each state, despite the large differences in the degree of economic impact. Given that the indicators cover multiple dimensions of the national economy, we can decompose economic fluctuations into its main potential driving forces. For example, unfavorable labor market development and sudden decline in mobility were key determinants of economic collapse in most states in the early stages of the COVID-19 pandemic, and the subsequent recovery from more diverse sources, even if the labor market continues to play an important role.
This is an important paper for researchers and policy makers who need to track the economic development of sub-countries at a higher frequency than the standard quarterly or monthly. These figures in the paper illustrate the usefulness of this method.
Source: Baumeister, Leiva-León and Sims, “Tracking state-level economic conditions every week”
Source: Baumeister, Leiva-León and Sims, “Tracking state-level economic conditions every week”
Source: Baumeister, Leiva-León and Sims, “Tracking state-level economic conditions every week”
