The NCSU Index of North Carolina leading economic indicators, (the “Index”), a forecast of the economy’s direction four to six months ahead, declined by 0.8% in September. This continued a downward trend in the Index, which has dropped in eight of the past twelve months.
The pullback was widespread across all but one of the Index’s components – the exception being a decline (which is an improvement) in initial jobless claims.
It is noteworthy that the national index (ECRI-WLI) also retreated in the last month and during the past year. This suggests national factors are at least partially responsible for the expected slower growth path of North Carolina’s economy. In particular, sluggishness in the manufacturing sector – which is relatively twice as important in North Carolina than in the nation – is being impacted by the higher valued dollar and weakness in many foreign markets.
About the Index: The Index is composed of five components: the Economic Cycle Research Institute (ECRI)’s Weekly Leading Index (http://www.businesscycle.com/resources/), North Carolina initial claims for unemployment benefits, North Carolina building permits, average weekly hours of work of all North Carolina employees in manufacturing, and average weekly earnings of all North Carolina employees in manufacturing.
All data are seasonally-adjusted and modified for differences in prices levels where appropriate. Data are from the U.S. Bureau of Labor Statistics, the U.S. Census Bureau, and ECRI, whose permission to use their Weekly Leading Index is greatly appreciated. All calculations are done by Dr. Michael Walden.
Comments should be directed to Dr. Michael Walden at michael_walden@ncsu.edu.
