Recession Is Over in Richmond Fed Region

RICHMOND FED -- In July, the seasonally adjusted manufacturing index — our broadest measure of manufacturing activity — jumped to 14 from June's reading of 6 (see chart above, click to enlarge). Among the index's components, shipments leaped 14 points to 16, new orders rose eight points to finish at 24, and the jobs index edged up one point to end at −5.

Other indicators also suggested mostly stronger activity. The orders backlogs index eased four points to 4, while the measure for delivery times edged up two points to 2. The capacity utilization index doubled, adding seven points to 14, while our gauges for inventories grew at a considerably slower pace. The finished goods inventory index retreated 14 points to 26, and the raw materials inventory index moved down 10 points to 8.

MP: The Richmond Fed Manufacturing Index has increased for five straight months (March-July), the first five-consecutive monthly increase in the index's history (back to 1994). Further, the Manufacturing Index has increased by 69 points from the December 2008 low reading of -55 to 14 points in July, suggesting that the recession has ended in the Richmond Fed region (MD, VA, WV, NC, SC and DC).