Maine versus New Hampshire III
Every month the Federal Reserve Bank of Philadelphia publishes their State Coincident Index which is an important gauge of economic activity within a state. In their words: “The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.”
According to the index, Maine not only lags all New England states, but also lags the national average. At the other end of the spectrum, New Hampshire not only leads all New England states, but also leads the national average. In both cases, the lead is by a significant margin (to see graph, click “continue reading.”). If, as some folks stipulate, New Hampshire’s growth is a direct result of its proximity to Boston; then: (1) why is New Hampshire growing significantly faster than Massachusetts and (2) why isn’t Rhode Island getting the same pick-up in economic activity? Could it be because Rhode Island’s tax burden looks more like Maine’s than it does New Hampshire’s?