If you take a quick perusal of the latest Philadelphia Fed survey of business conditions, you can’t escape the conclusion: This is happening.
And by this, we mean the above-trend economic acceleration we’ve been craving for a long time.
Here’s the headline summary of what businesses reported seeing:
Manufacturing firms responding to the June Business Outlook Survey indicated that regional manufacturing activity expanded this month. The survey’s indicators for general activity, new orders, and shipments were positive for the fourth consecutive month and improved from their readings in May. Current employment was also higher among the reporting firms this month. The survey’s indicators of future activity improved notably, suggesting that firms are more optimistic about continued growth over the next six months.
Today’s survey is not the only sign that things are on the mend.
On Monday, a survey from the New York Fed had similar conclusions. And in fact the “New Orders” index for manufacturers surged to its highest level in four years.
Meanwhile, there’s evidence that credit creation is really starting to kick into a higher gear, which is absolutely crucial for sustainable economic momentum.
Here’s a look at the year-over-year growth in loans and leases at commercial banks. This number has been on a solid uptrend all year.
A couple of weeks ago, when we first started getting economic data for the spring, we declared that the moment of truth for the economy was right now. You see, the economic data for May was quite solid, but in and of itself, it didn’t prove that the economy was reaccelerating. Why? Because May might have just reflected pent-up demand from the weak, cold-weather depressed winter. But now we’re getting June numbers, and they remain quite solid. It looks like this is the real deal.