PMI Spread in Services Favors Euroland Over United States

November 4, 2009

PMIs U.S. Ezone   U.S. Ezone   Sum of
  Services Services Spread Mf’g Mf’g Spread Spreads
Feb 2008 49.7 52.3 -2.6 48.8 52.3 -3.5 -6.1
March 49.9 51.6 -1.7 49.0 52.0 -3.0 -4.7
April 51.9 52.0 -0.1 48.6 50.7 -2.1 -2.2
May 51.2 50.6 +0.6 49.3 50.6 -1.3 -0.7
June 48.8 49.1 -0.3 49.5 49.2 +0.3 0.0
July 49.6 48.3 +1.3 49.5 47.4 +2.1 +3.4
August 50.4 48.5 +1.9 49.3 47.6 +2.1 +4.0
Sept 50.0 48.4 1.6 43.4 45.0 -1.6 0.0
October 44.6 45.8 -1.2 38.7 41.1 -2.4 -3.6
November 37.4 42.5 -5.1 36.6 35.6 +1.0 -4.1
December 40.1 42.1 -2.0 32.9 33.9 -1.0 -3.0
Jan 2009 42.9 42.2 +0.7 35.6 34.4 +1.2 +1.9
Feb 41.6 39.2 +2.4 35.8 33.5 +2.3 +4.7
March 40.8 40.9 -0.1 36.3 33.9 +2.4 +2.3
April 43.7 43.8 -0.1 40.1 36.8 +3.3 +3.2
May 44.0 44.8 -0.8 42.8 40.7 +2.1 +1.3
June 47.0 44.7 +2.3 44.8 42.6 +2.2 +4.5
July 46.4 45.7 +0.7 48.9 46.3 +2.6 +3.3
August 48.4 49.9 -1.5 52.9 48.2 +4.7 +3.2
Sept 50.9 50.9 0.0 52.6 49.3 +3.3 +3.3
October 50.6 52.6 -2.0 55.7 50.7 +5.0 +3.0

 

October saw the U.S. and euro area record purchasing manager indices with readings above 50 in both manufacturing and non-manufacturing.  That means that activity is expanding on both cylinders in each economy.  The table above derives first differences between the U.S. and Euroland.  Whereas the spread in manufacturing is getting more favorable to the U.S. because of the weaker dollar, the differential in the more important services sector has become more favorable to Europe.  The sum of the two spread shown in the right-most column above has been very steady since July.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.

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