Europe But Not United States in Recession According to PMI Surveys

November 4, 2011

U.S. economic activity deteriorated last month in both the United States.  Each region recorded a lower purchasing managers reading than in September in both manufacturing and service-sector industries.  However, growth in the United States remains positive, just slower, whereas recessionary conditions intensified in Europe as attested by a third straight sub-50 reading there in manufacturing and a second straight sub-50 score in services.  The data below document these four data series since the worst part of the Great Recession.  The 6.5 differential between the U.S. and euro area service-sector PMI scores is wider than any other month shown.  So is the 10.2-point sum of the manufacturing and non-manufacturing spreads, which appears in the rightmost column.

  • The U.S. services PMI of  52.9 has declined by 6.8 points since cresting in February 2011, and the U.S. manufacturing PMI has dropped 10.6 points to 50.8 since its peak last February.
  • Euro area scores peaked a month later than in the United States and since March 2011 have decreased by 10.8 points to 46.4 in services and by 10.4 points to 47.1 in services.  Euroland’s composite purchasing managers index printed in October at 46.5, down from 49.1 in September and implying negative fourth-quarter GDP growth of 0.5% or more, not annualized.

The 0.1-point dip of the U.S. services index in October was mitigated by a 4.6-point advance in the jobs sub-component and seems to understate the true extent of deterioration.  Sales and orders worsened last month by 3.3 points and 4.1 points, respectively.

Only Ireland and Germany among reporting euro area members had service PMI scores of at least 50.0 in October, and Germany’s 50.6 reading really suggests stagnation rather than growth.  The French, Italian and Spanish readings were deep in the red at 44.6, 43.9, and 41.8.

PMIs U.S. Ezone   U.S. Ezone   Sum of
  Services Services Spread Mf’g Mf’g Spread Spreads
Feb 2009 42.1 39.2 +2.9 35.7 33.5 +2.2 +5.1
March 41.2 40.9 +0.3 36.4 33.9 +2.5 +2.8
April 43.9 43.8 +0.1 40.4 36.8 +3.6 +3.7
May 44.5 44.8 -0.3 43.2 40.7 +2.5 +2.2
June 46.3 44.7 +1.6 45.3 42.6 +2.7 +4.3
July 46.7 45.7 +1.0 49.1 46.3 +2.8 +3.8
August 48.2 49.9 -1.7 52.8 48.2 +4.6 +2.9
Sept 50.1 50.9 -0.8 52.4 49.3 +3.1 +2.3
October 50.1 52.6 -2.5 55.2 50.7 +4.5 +2.0
November 48.4 53.0 -4.6 53.7 51.2 +2.5 -2.1
December 49.8 53.6 -3.8 54.9 51.6 +3.3 -0.5
Jan 2010 50.5 52.5 -2.0 58.4 52.4 +6.0 +4.0
Feb 52.7 51.8 +0.9 57.1 54.2 +2.9 +3.8
March 54.1 54.1 0.0 60.4 56.6 +3.8 +3.8
April 54.6 55.6 -1.0 59.6 57.6 +2.0 +1.0
May 54.8 56.2 -1.4 57.8 55.8 +2.0 +0.6
June 53.5 55.5 -2.0 55.3 55.6 -0.3 -2.3
July 53.7 55.8 -2.1 55.1 56.7 -1.6 -3.7
August 52.8 55.9 -3.0 55.2 55.1 +0.1 -2.9
Sept 53.9 54.1 -0.2 55.3 53.7 -0.4 -0.6
October 54.6 53.3 +1.3 56.9 54.6 +2.3 +3.6
November 56.0 55.4 +0.6 54.2 55.3 +2.9 +3.5
December 57.1 54.2 +2.9 58.5 57.1 +1.4 +4.3
Jan 2011 59.4 55.9 +3.5 60.8 57.3 +3.5 +7.0
Feb 59.7 56.8 +2.9 61.4 59.0 +2.4 +5.3
March 57.3 57.2 +0.1 61.2 57.5 +3.7 +3.8
April 52.8 56.7 -3.9 60.4 58.0 +2.4 -1.5
May 54.6 56.0 -1.4 53.5 54.6 -1.1 -2.5
June 53.3 53.7 -0.4 55.3 52.0 +3.3 +2.9
July 52.7 51.6 +1.1 50.9 50.4 +0.5 +1.6
August 53.3 51.5 +1.8 50.6 49.0 +1.6 +3.4
Sept 53.0 48.8 +4.2 51.6 48.5 +3.1 +7.3
October 52.9 46.4 +6.5 50.8 47.1 +3.7 +10.2

Copyright 2011 Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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