Nowcasting the Trajectory of the COVID-19 Recovery

RESEARCH PAPERS ARE PRELIMINARY MATERIALS CIRCULATED TO STIMULATE DISCUSSION AND CRITICAL COMMENT. THE VIEWS EXPRESSED ARE THOSE OF THE INDIVIDUAL AUTHORS. WHILE RESEARCH PAPERS BENEFIT FROM ACTIVE UHERO DISCUSSION, THEY HAVE NOT UNDERGONE FORMAL ACADEMIC PEER REVIEW.

I develop a weekly coincident index of economic activity in the State of Hawaii. The purpose of the index is to nowcast the recovery from the COVID-19 induced downturn. The index is the first principal component extracted from 18 daily and weekly state-level time series, it captures about 80% of the variation in the sample, it is available with a four-day lag, and it leads the changes in nonfarm payrolls and the Philadelphia Fed coincident index.

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