Richmond Fed Index Reaches All-Time High in April

"Manufacturing activity in the central Atlantic region expanded for the third straight month, according to the Richmond Fed's latest survey. All broad indicators — shipments, new orders and employment — landed in positive territory, with manufacturers noting their first increase in worker numbers since October 2009. Other indicators were also positive. Backlogs increased for the first time since August 2009 and capacity utilization hit an all-time high reading since the inception of the measure. Vendor lead-time grew at a considerably quicker rate — the highest reading since August 2004, indicating slower delivery times, and inventories increased at a somewhat quicker pace.

In April the seasonally adjusted composite index of manufacturing activity — our broadest measure of manufacturing — jumped 24 points to 30 from March's reading of 6 (see chart above). Among the index's components, shipments moved up 25 points to 30, new orders leaped 31 points to finish at 41, and the jobs index advanced 13 points to end at 13.

MP: The Richmond Fed Manufacturing index reading of 30 in April was the highest-ever index level in the history of the series back to 1994. The 85-point increase from -55 in December of 2008 to 30 in April 2010 is probably one of the strongest signs to date of a V-shaped economic recovery.