January 14, 2009

Unique Index on Tech-Sector Indicators Now Available Monthly
on the San Francisco Fed Website

SAN FRANCISCO, January 14, 2009—A popular and unique index, known as Tech Pulse, that measures economic indicators for the high-tech industry has returned to the internet and is now available at the Center for the Study of Innovation and Productivity (CSIP) website at the Federal Reserve Bank of San Francisco (FRBSF).

Formerly available on the Federal Reserve Bank of New York’s website, the Tech Pulse Index tracks the growth of economic activity in the U.S. tech sector by combining information from five main tech-sector indicators on employment, investment, production, shipments and consumption.  FRBSF Economist Bart Hobijn explains that the index extracts, on a real time basis, the main common trend in these indicators.  “Therefore, it tends to provide a clearer picture of trends in the tech sector than the separate indicators themselves,” he said.  Hobijn previously developed the index with colleagues while he was at the New York Fed.  He has since retooled it and brought it with him to the SF Fed’s CSIP Center, where it will be posted by noon Pacific (3 p.m. Eastern) on the second Wednesday of the month. The Tech Pulse, which attracted a following among reporters, economists and market analysts, hasn’t been available since last August.

Hobijn today publishes an Economic Letter titled “The Tech Pulse Index: Recent Trends in Tech-Sector Activity,” (http://www.frbsf.org/publications/economics/letter/2009/el2009-03.html) that explains how he uses the index to make assessments of the health of the industry. This Economic Letter is based on the January 14, 2009, release of the index. That release as well as detailed information about the index’s construction is available at:  http://www.frbsf.org/csip/pulse.php.

Hobijn’s analysis in today’s Economic Letter suggests that the current downturn in the tech sector is much less severe than the 2001 slowdown, which was triggered by the dot-com bust.  He points out that this tech-sector downturn is of the same order of magnitude of those in 1991, 1983, and 1974, and opines that in the current economic climate, it is unlikely the most recent numbers reflect the bottom of the current business cycle in the tech sector. See the full text of Hobijn’s Letter for the detailed discussion.

Mary Daly, VP and Director of the FRBSF’s Center for the Study of Innovation and Productivity, said, “We are very pleased to have Bart on our team and to add this unique index to the wealth of resources we already offer on our CSIP site.” (http://www.frbsf.org/csip)

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