In their seminal work, Burns and Mitchell's (1946) definition of business cycles has two key features. The first is the comovement or concurrence among the individual economic indicators, and the other feature is that business cycle is governed by a switching process between different phases. In general, extracting the comovement among the economic indicators leads to the creation of the composite indicators (CI), which enables policy-makers to define the current state of the aggregate economy. That is, the creation of the CI would inform us whether the economy is currently experiencing a slowdown, a boom, or whatever.
This paper is a continuation of the previous paper on the CEI (Sloboda et al., 2017) which used the three key economic variables, Average Income Per Year, Unemployment rate, and Housing Prices per year on the economy of four large state: Texas, New York, Florida and California. This paper develops a method for calculating composite economic index (CEI) for rest of the United States.