Leading economic indexes for New York State and New Jersey

Abstract

The authors develop indexes of leading economic indicators for New York State and New Jersey over the 1972-99 period. They find that the leading indexes convey useful information about the future course of economic activity in both states. The authors then construct separate indexes to forecast recessions and expansions in each state. The movements of the recession and expansion indexes are found to display a close relationship with the behavior of the leading indexes. Accordingly, the recession and expansion indexes allow the authors to extend the informational content of the leading indexes by estimating the probability of an upcoming cyclical change in state economic activity within the next nine months.Economic indicators ; New York (State) ; New Jersey ; Index numbers (Economics) ; Economic conditions - United States ; Federal Reserve District, 2nd