Nevada's Decline

A recent article in the Las Vegas Review-Journal lamented the economic decline in the state according to a report by the Rockefeller Institute of Government in NY. The Rockefeller report cited a growth index released by the Philadelphia Fed, but reset the index to a baseline of January 2007, singling out Nevada as the worst performing state in the nation over that period.

Interested in the bigger picture, I looked up the original index from the Philadelphia Fed and charted it back to its original baseline of July 1992. The results show a much more interesting picture for the state of Nevada.

We see a meteoric rise in economic activity in Nevada, far surpassing any state since 1992. Then as late as November 2007, the bottom began to fall out. The recent decline in Nevada is certainly serious, but we can always benefit by putting as much data into the picture as possible. What if the Rockefeller report had chosen January 2005 as a baseline? It would have shown Nevada as about flat, but obscured the detail of its true growth trajectory.