The Federal Reserve Bank of Philadelphia on Tuesday published its monthly State Coincident Index – a ranking of states’ economic health – placing Maine among the top 10 growing economies.
The index is based on four state-level variables: nonfarm payroll employment, average hours worked in manufacturing, wage and salary disbursements deflated by the consumer price index, and the unemployment rate.
Data for the index is obtained via the federal Bureaus of Labor Statistics and Economic Analysis.
The state ranked in the second-highest tier in September’s report, with growth between 0.6 and 1.0 percent.
Maine’s ranking in the more recent October index was greater than 1.0 percent, according to the report, which indicates positive average trends across the four variables for the last three months.
Other states with indexes higher than 1 percent include North Dakota, Oregon, Indiana, West Virginia, North Carolina, South Carolina, Georgia, Delaware and Louisiana.
A spokesman from the Philadelphia Reserve Bank told The Maine Wire that while the ranking of states says little — it’s difficult to compare the economy of New York with that of South Dakota, for example — the index does provide an accurate and timely measure of Gross Domestic Product (GDP) for each state.
“There is significant volatility in components underlying the indexes, especially for nonfarm employment,” said Thomas Elliott. He said this monthly volatility generates substantial volatility of the indexes for each state.
However, Eliot said, “the state coincident indexes track an individual state’s GDP quite well, and in that sense, they are a useful proxy for state GDP.” He said the advantage of the index is that it is more timely and frequent than state GDP estimates.
The administration of Gov. Paul LePage touted the report in a Monday press release.
“When we took office, Maine’s economy was a mess, workers were losing their jobs in droves, and our state budget was a nightmare after years of liberals who advocated for tax increases, out-of-control government spending and the use of one-time money from the federal government,” said LePage.
“We’ve come a long way in the nearly three years since then. Our economy is growing, and over 8,000 more people are working since 2011,” he said. “Our Administration is working to reform welfare to provide Mainers with job training to enable them to become self-sufficient, and we are continuing to improve Maine’s business climate so more jobs are available.”
According to the administration, the Philadelphia Fed report is the latest of many positive signs for Maine’s economy.
“From January 2013 to August 2013, the Maine Department of Economic and Community Development (DECD) certified 12 businesses anticipating 267 new jobs, generating $14.2 million in payroll and nearly $70 million in new investment,” the administration states in its release. “Over the same period in 2012, DECD certified 14 businesses anticipating 128 news jobs, generating $6.3 million in payroll and just over $157 million in new investment.”
The administration also notes that Maine’s unemployment rate, at 6.7 percent, is below the national average of 7.3 percent.
House Majority Leader Seth Berry (D-Bowdoinham) attempted to discredit the index in a prepared statement, noting that Maine’s unemployment rate “relative to the national unemployment rate” is worse than it was in January of 2011.
“Maine can do better than to take credit for a national recovery,” said Berry. “Instead, we need to roll up our sleeves and work together to strengthen our middle class and to increase opportunity for the people of Maine.”
The next coincident index will be published on Christmas Eve.