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The Federal Reserve Bank of Philadelphia's forecasting gauge for New Jersey turned positive in July after 16 straight negative months.

July's improvment - from -0.7 to 1.1 - suggests the state's economy will expand moderately in the second quarter of 2010, the report said.

The turnaround comes three months after that of a similar forecasting gauge for the nation published by the Conference Board.

Richard Perniciaro, director of the Center for Regional and Business Research at Atlantic Cape Community College in Mays Landing, said the upturn is good news for New Jersey, but the state's recovery likely will lag behind the nation's - and southern New Jersey's will come after the state's.

Beginning with the 1991 recession and again in the 2000 recession, he said, jobs in southern New Jersey took longer to bounce back than in the state and nation. The reason: The region had become a predominantly service economy by then, one that is more dependent on discretionary consumer spending.

A great summer season could have helped the region catch up this year, but the weather and economy prevented that, he said.

"It's hard to see where locally things could level out and start moving upward incrementally," Perniciaro said.

The business research center's forecasting gauge for southern New Jersey has yet to turn positive, Perniciaro said. When that happens, it will indicate how long the region's recovery will lag behind the state's.

Pennsylvania's leading index improved from -4 in June to -1.2, while Delaware's rose from -6.1 to -3.4 in July.

The forecasting gauges for both states have been negative for at least two years.

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