Philly Fed Indexes: Not as Bad as Reported?

The Philadelphia Federal Reserve released data today on regional manufacturing activity, and most news reports focused on the decline in the current activity index, which fell from 21.4 in May to 8.0 in June, the lowest reading in ten months.  The chart above displays the current index back to 1990 and shows that it can both be pretty volatile month-to-month, and often falls below zero, even in economic expansions. 

For example, in the longest and strongest economic expansion in U.S. history from March 1991 to March 2001, the current activity index was sometimes negative.  And in the several year period following the last recession, there were months of negative readings in 2002 and 2003.  So the fact that the current activity is still positive at 8.0 in June shouldn't be a major concern for now.   

What didn't receive as much news attention as the current index was the future activity index, which has stayed around 40 for the last 14 months and remains at a level consistent with future economic expansion in the years to come, e.g. comparable to the levels in 2002 and 2003.  According to the report, "Firms expect continued growth in their manufacturing business over the next six months, with over half of the firms expecting growth in activity, new orders, and shipments."