by Calculated Risk on 12/18/2008 10:00:00 AM

Here is the Philadelphia Fed Index for December activity released today: Business Outlook Survey.

Conditions in the region's manufacturing sector continued to deteriorate this month, according to firms polled for the December Business Outlook Survey. All of the survey's broad indicators remained negative this month and at relatively low levels. Firms reported declines in input prices and the prices for their own manufactured goods this month. Consistent with the weakness in current activity, most of the survey's indicators of future activity slid further into negative territory, suggesting that the region's manufacturing executives expect continued declines over the next six months.

The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, improved from -39.3 in November to -32.9 this month. The index, which fell a dramatic 41 points in October, has remained near its current low reading for the past three months ...
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The current employment index fell for the third consecutive month, decreasing four points, to its lowest reading since September 1982.

Click on graph for larger image in new window.

This graph shows the Philly index vs. recessions for the last 40 years.

The manufacturing sector had performed somewhat better than other sectors of the economy until October. Now the manufacturing sector is clearly in recession.