Another V-Sign of Economic Recovery: Philadelphia Fed Index Highest Since Apr. 2004, 4 1/2 Year High
PHILADELPHIA FED -- Activity in the region's manufacturing sector is expanding, according to firms polled for this month's Business Outlook Survey. Indexes for general activity, new orders, and shipments all remained positive this month. Indicative of improvement, the overall level of employment and average work hours among reporting firms increased this month. Overall, expectations moderated somewhat in December, although the forecast for employment improved slightly.
The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, increased from 16.7 in November to 20.4 this month. The index has now remained positive for five consecutive months (see chart above, click to enlarge, data here).
MP: The 61.7 point improvement in the Philadelphia Fed Current Activity Index from -41.3 in February to +20.4 in December follows a pattern very similar to the last two recessions (see red circles in graph) and provides an additional V-sign indicator that we are now in a period of unmistakable economic expansion (see more here).