Indices from Philadelphia and Chicago federal reserve banks give reasons for optimism


I periodically post information about the current state of the economy from the Federal Reserve Bank of Chicago, which publishes a monthly economic index based on 85 weighted factors, and the Federal Reserve Bank of Philadelphia, which publishes a coincident index based on employment indicators.

From the latest Chicago Fed index:

The Chicago Fed’s index can be confusing, because the main horizontal line represents ordinary trend growth, not the line between expansion and contraction. The three month average inched closer to trend growth, and for the month of December the index was a solid +0.17.

From the Philly Fed index:

Georgia is in the green. Despite year-over-year declines in the number of jobs, the number of new applications for unemployment insurance and the unemployment rate have been falling. And the job losses seem to have found bottom.

None of this is great news, especially in light of the depth of the recession, but it’s solid data given the perils the economy still faces.