CBER-DETR NEVADA COINCIDENT AND LEADING EMPLOYMENT INDEXES: Construction Method

Transcription

1 CBER-DETR NEVADA CONCDENT AND LEADNG EMPLOYMENT NDEXES: Consucion Mehod 1. Geneal Mehod The following ex descibes he mehod of consucing he Nevada Coinciden and Leading Employmen ndexes. Given he aw seies ha will appea in he index, we fis seasonably us each seies. Finally, some seies ae inveed, ha is, muliplied by minus one, since a peak in he seies eally capues a ough fo he index. Fo example, when compuing an employmen index, highe employmen associaes wih lowe unemploymen ae, ohe hings consan. Thus, adding he unemploymen ae o he employmen index equies ha we inve he unemploymen seies. The consucion poceeds wih he following eigh seps. Sep 1 We begin by compuing he monhly symmeical pecenage changes. This convesion gives he same weigh o posiive and negaive changes in he seies. Fo level seies, we compue he diffeence in he monhly level divided by he aveage of he wo monhly levels and hen muliply he oucome by 100 o geneae a pecenage changes. The geneal fomula is as follows: c i 200( xi xi 1) x x i i1, (1) whee x i is he daa fo monh of componen (seies) i. f a seies aleady comes as a pecenage change, hen he fis sep akes he diffeence in he seies o calculae he monhly symmeical pecenage change as follows: c x x (2) i i i 1

2 Sep 2 This usmen nomalizes he usmens fo each seies so ha no one seies dominaes he index because i expeiences moe volaile movemen han he ohe seies in he index. We compue he aveage of he long-un absolue values of he pecenage changes calculaed in sep 1. n ohe wods, we divide equaion (1) by he long un aveage of hei absolue values. Thus, he sandadized monhly symmeic pecenage changes ( s i ) is given as follows: n ci si, 2 c whee c i Ai Ai ( n 1). (3) Sep 3 We nex aveage he sandadized monhly symmeical pecenages wih equal weighs acoss all componens (seies) in he index, which we define as. as he aveage of he sandadized componens, hen he fomula becomes; s M i 1 i, (4) M whee M is he numbe of he componens (seies) in he index. Sep 4 We solve fo he aw index wih value 100 fo he iniial monh as follows. The seies measues he monhly symmeical pecenage changes in he index. Thus, we can hink of he coming fom he soluion o equaion (1) whee he index, which we do no know, subsiues ino he igh hand side of equaion (1) and subsiues ino he lef-hand side. As a esul, we ge he following: 200( 1) 1. (5)

3 Nex, we solve fo as follows: (200 ) (6) To calculae each peiod, we mus know boh 1 and. We jus calculaed he seies fo. We begin he calculaions by assuming ha he index equals 100 in he fis peiod. Sep 5 We implemen he evese end usmen pocess o limi he possibiliy of false uning-poin signals in he index. We choose a age seies such as non-fam employmen and idenify he fis and las peaks of ha seies in he sample peiod. Then we calculae he aveage gowh ae fom peak o peak of he age seies. The end usmen faco hen equals he diffeence in he aveage end gowh ae of he age seies minus he aveage end gowh ae in he aw index. So we also need o idenify he fis and las peaks in he aw index o calculae he aveage gowh ae fom peak o peak of he aw index seies. Sep 6 We add he end usmen faco ino he aveage sandadized componens seies calculaed in sep 3 o poduce he used aveage sandadized componens seies, Sep 7. We now epea sep 4 o geneae he end used index,. The used equaions o geneae he end used index ae given as follows: 200( ) 1 1 and (7) (200 ) (8)

4 Sep 8 Finally, we choose a base yea fo he index. We divide he end used index by is value in he base yea and muliply by Nevada Coinciden Employmen ndex The vaiables chosen fo he Nevada Coinciden Employmen ndex ae given as follows: 1. Household employmen 1976:1 o 2007:12 2. Non-Fam Employmen 1976:1 o 2007:12 3. Unemploymen Rae (inveed) 1976:1 o 2007:12 4. nsued Unemploymen Rae (inveed) 1987:4 o 2007:12 The Nevada Depamen of Employmen, Taining and Rehabiliaion (DETR) povides daa on non-fam employmen fom he Cuen Employmen Saisics (CES) daa as well as household employmen, he labo foce, and he unemploymen ae fom he Cuen Populaion Suvey (CPS) daa. n addiion, DETR also povides he weekly insued unemploymen ae fom he U.S. Depamen of Labo, Employmen & Taining Adminisaion. We conve he weekly daa ino a monhly seies. 3. Nevada Leading Employmen ndex The vaiables chosen fo he Nevada Leading Employmen ndex ae given as follows: 1. niial Claims (inveed) 1976:1 o 2007:12 2. Real Moody s BAA (inveed) 1976:1 o 2007:12 3. Housing pemis 1980:1 o 2007:12 4. Commecial Pemis 1988:1 o 2007:12 5. Consucion Employmen 1990:1 o 2007:12 6. Sho-Duaion Unemploymen Rae (inveed) 2001:1 o 2007:12

5 DETR povides daa on iniial claims fo unemploymen insuance as well as he numbe people dawing unemploymen insuance fo 15 weeks o less and he coveed level of employmen fom he U.S. Depamen of Labo, Employmen & Taining Adminisaion. We calculae he sho-duaion unemploymen ae as he aio of he numbe of people dawing unemploymen insuance fo 15 weeks o less o he coveed level of employmen imes 100 o conve ino a pecenage. DETR also povides he infomaion on he level of consucion employmen fom he Cuen Employmen Saisics (CES) daa. The Cene fo Business and Economic Reseach (CBER) povides he monhly daa on housing pemis and commecial building pemis fo Clak and Washoe Counies. We aggegae he numbes fo Clak and Washoe Counies o compue a poxy fo housing and commecial building pemis fo Nevada. Finally, daa on he Moody s Baa inees ae and he consume pice index come fom he Fedeal Reseve Bank of S. Louis FRED daa base. We calculae he yea-ove-yea inflaion ae fom he CP and subac ha fom he Moody s Baa inees ae o compue he eal Moody s Baa inees ae.