The D6 Factor (Sixth District Common Economic Factor) is an index of the trend common to 48 distinct monthly series of economic data for the six states that lie entirely (Alabama, Florida, Georgia) or partly (Louisiana, Mississippi, and Tennessee) within the Sixth Federal Reserve District. (This indicator was introduced and described in detail in a 2007 Economic Review article. A revised methodology for the index, with an expanded data set and sample estimation period, was introduced in a 2009 Economic Review article.)
The D6 Factor provides a broad measure of the Southeast's economic conditions that is timelier and available at a higher frequency than estimates of gross domestic product (GDP) for Sixth District states made by the U.S. Bureau of Economic Analysis. Moreover, unlike an average of state-level GDPs or other factors, the D6 Factor is able to filter out idiosyncratic shocks that disproportionately affect individual states.
Note: The D6 Factor was discontinued after our February 2014 post. Please access the archives for previous posts.