Technical Report- January 18, 2013

Introduction State, Federal, and private entities produce a myriad of data about the national and state economy. Much of this data, however, is released with a substantial lag of several months up to several years. Much of the data also only reports on segments of the economy, rather than providing an overall measure of economic progress. Yet, there is a clear need for comprehensive and current measures of the economy, and current updates about the economic outlook. This information is provided at the national level by the Conference Board, which produces a leading and coincident indicator for the national economy. The current indicator represents a snapshot of the current state of the economy and the leading indicator provides a short-term forecast for the national economy. These national indicators are useful for Nebraska business, and for the public in Nebraska. However, the Nebraska economy does not exactly mirror the national economy, creating a constant concern about whether these national indicators provide information pertinent to Nebraska. As a result, we have developed the Coincident Economic Indicator – Nebraska and the Leading Economic Indicator - Nebraska to fill this void. Together, the two indicators provide a picture of current conditions in Nebraska and a short-term forecast of overall economic conditions in the state. In other words, the CEI - N and LEI - N together provide a current indicator about the strength of the aggregate Nebraska economy and a short-term, 6 month outlook, each of which can be updated on a monthly basis. A key feature of the coincident indicator is that it will provide a current, comprehensive measure of the state economy. Other comprehensive measures such as state GDP or personal income are released with a lag of 6 to 18 months. The leading indicator can identify turning points in the economy. Specifically, the leading indicator will identify and predict acceleration, deceleration, or even the onset of a recession in the Nebraska economy