Economy Peachy In North Dakota

The coincident index measures whether the economy is currently in a boom, a recession, or holding steady. It measures how the economy is doing now. In contrast, the leading index of economic indicators describes where the economy is going, and a lagging index of economic indicators closely track where the economy has been in the past.

Two states have positive coincident indexes for their state economies for the past three month period. North Dakota is doing best (up a little more than 1%), and Mississippi is on the positive side. Montana is neutral over that time period. Vermont, North Carolina and Virginia are the healthiest of the states with declining economies.

The news for every other state, including Colorado (down a little more than 1% and close to the national average), is bad. The five states whose economies are currently in the worst shape over the past three months are, in order, West Virginia (-8%), Michigan (-7%), Nevada (-5%), Oregon (-5%) and Washington (-4%).

Interestingly, neither the winners nor the losers in the current economy have obviously shared reasons for their economic fates. No one or two industries are driving these trends.

While West Virginia, Michigan and Nevada are all declining deeply, for example, their economies, rural with coal as an important industry in West Virginia, manufacturing based in Michigan, and hospitality and real estate based in Nevada, have very little in common with each other.

Winner Montana's rural economy that is a national leader in coal production looks a like like loser West Virginia's on paper. North Dakota's healthy agricultural economy is not obviously very different from that of its neighbors in the Great Plains that are doing worse. Mississippi currently has at least as much of a stake in the nationally ailing manufacturing industry, and automobile production in particular, as it does in its historical mainstay, the agricultural industry.

State economic data, because they are based on smaller sample sizes than national economic data, can be quirky. But, looking at a three month time horizon, which is largely confirmed by the most recent months (admittedly autocorrelated) data should stabilize the numbers.