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Surely
you've heard some of the good news about the national economy
recently. Third
quarter growth in the overall economy, recently revised upward
to a blistering 8.2 percent, is the highest we've seen in almost
twenty years. That
growth has been fueled in part by two consecutive quarters of
galloping growth in productivity.
Output per labor-hour increased in the non-farm economy by an
incredible 9.4 percent last quarter.
Even manufacturing seems to be coming around.
The last five months have seen increases in the Federal
Reserve's Index of Industrial
Production for manufacturing, and the November report of the
National Institute of Supply Management's Purchasing Manager's Index
indicates that the expansion in output is getting stronger.
Now let's take a moment to see how these indicators are performing
in the
Indiana
economy.
As you will see, it will only take a moment.
How is overall growth in the
Indiana
economy
shaping up? That's a
simple question to answer. We
don't know. There are no
quarterly data on Indiana Gross State Product, and annual data will
only become available after a lag of about three years.
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Are
we seeing the same kinds of increases in productivity among
Indiana
businesses
that are showing up in the national data?
Again, we don't know. We
can get some information on productivity for manufacturing at the state
level, but we have to wait several years before it is reported.
You can see where this is going. We'd
like to tell you that Indiana's manufacturers are seeing a strong pickup
in business akin to what is being reported nationally, but we really
don't know that either.
Those answers surprise a lot of people.
Many of us imagine statistical reports on the national economy as
being produced with some kind of gigantic calculator.
How, we might ask, can we know what things add up to and not be
able to say anything about the individual pieces?
One answer to this question is that most data are compiled from surveys,
and survey-based estimates are not produced by anything representing a
calculator. It’s a bit
like the Nielsen ratings of television programs -- they may do a great
job of estimating viewership overall, but can't tell us who's watching
what in
Kokomo
.
Other
problems are more fundamental. When
we add up Gross Domestic Product for the
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nation,
for instance, we have to keep track of imports and exports.
That's not too bad -- we've got customs offices and paperwork to
help us. But how do you keep
track of what
Indiana
sells to
Ohio
?
Few of us would put up with paperwork and border checks at state
lines just so a few economists can have fun with the data.
But mostly it boils down to money. It
is ironic that in this, the information age, we are actually receiving
less data than in years past on states and regions.
Indiana
retail sales data were discontinued in 1996.
Information on industrial electricity sales, which are the basis
for manufacturing output estimates, was drastically curtailed in the
wake of utility mergers and acquisitions.
And 2000 will undoubtedly be the last hurrah for the long-form
Census that provides so much detail for even the tiniest communities.
Those of us who track the state and local economies have long learned
how to adapt to this situation. We
use whatever we can find -- employment, building permits, and state tax
receipts -- to get a read on how the state is performing.
But you should know that there are plenty of questions we just
can't answer.
Patrick M. Barkey
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