By Simon Medcalfe, Hull College of Business, contributing writer
The Augusta Leading Economic Index (Augusta LEI) is a monthly composite index that combines several national, regional, and local indicators into a single variable. Leading indexes combine variables that change before business cycle variables such as employment changes. Leading indexes may, therefore, indicate changes that could occur in the economy. Leading indexes are not forecasts or predictions about the future, but may signify future economic activity.
The Augusta LEI may,therefore, provide local decision makers with timely information about future business cycle patterns in the Augusta area. The Augusta LEI uses economic indicators for the Augusta Metropolitan Statistical Area (MSA), which includes six counties (i.e., Burke, Columbia, McDuffie, and Richmond counties in Georgia, and Aiken, and Edgefield counties in South Carolina).
The index also includes regional and national indicators to reflect that national trends affect the local economy. The index is constructed in the same way that the Conference Board constructs the Leading Economic Index for the United States.
In May, the Augusta LEI increased 1.4 percent from April. The index is up 14.2 percent from a year ago. However, only two out of the five indicators increased in the last month: job openings and real deposits. The Bureau of Labor Statistics estimates that there were 1,175,000 job openings in the South United States in May up from a (revised) 1,080,000 in April. My own estimates of job openings in the Augusta area taken from Monster.com and Augustajobs.com suggest job openings in May were up just over 4 percent from April. This data, along with the fact that employment increased in May from April, suggests there may be some good news from the labor market.
Jul 30, 2010
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