The Philadelphia Fed released coincident indices today. Figure 1 shows state-by-state 3 month trends. Needless to say, the outlook for Kansas — that laboratory for supply side nostrums — is not auspicious.
Source: Philadelphia Fed, accessed 26 Oct 2016.
While Alaska seems to be in the running for worst performing, in fact the 3 month (annualized) decline of 4.5% for Kansas is the worst in the 50 states.
Figure 1 places the Kansas economic experience in the context of its neighbor’s, Missouri, and the Nation’s.
Figure 1: Log coincident index for Kansas (red), Missouri (blue) and US (black), all normalized to 2011M01=0. Source: Philadelphia Fed, September 2016 release.
Finally, Figure 2 shows that in general, economic activity has been revised downward from release to release.
Figure 2: Coincident index for Kansas from June release (blue), July release (red), August release (green), and September release (bold black), on log scale. Source: Philadelphia Fed coincident leading, various releases.
Bonus Picture Certain individuals have claimed that the coincident indices poorly represent economic activity for Kansas. According to the Philadelphia Fed, the correlation between the coincident index and GDP for Kansas is between 0.55-0.70. However, to further confirm that Kansas is underperforming, I present an additional figure comparing Kansas GDP against that of Missouri and the BEA Plains region ex.-Kansas.
Figure 3: Log GDP for Kansas (red), Missouri (blue), and Plains ex.-Kansas (green). NBER defined recession dates shaded gray. Source: BEA, NBER, and author’s calculations.
If it is not apparent, then let me observe that pre-Brownback, Kansas GDP outpaces Missouri and Plains ex.-Kansas. That pattern reverses after the advent of Brownback.
Postscript: Just to make sure people know, the current tailspin takes place during a period of no-drought in the state of Kansas.
But it’s a flyover state…..
We know you’ll take your next vacation in Wichita
Well, a tax cut can make someone say: “We’re not in Kansas anymore.”
Where are the usual suspects celebrating Brownback’s and the Koch Brothers turning Kansas into Galt’s Gulch? Admittedly, for both secular and commodity reasons all of the states between the Mississippi and the Rocky Mountains are facing headwinds and Republican misgovernment. But Kansas and Brownback have proven exceptional!
Imagine how bad that in-house quarterly report must’ve looked if they’re abandoning that for this.
There’s an obvious solution: More Tax Cuts!!!
Yes, a big middle class tax cut would offset the negatives.
And, workers could visit Disneyland.