U.S.-Ezone Manufacturing PMI Spread Last Month Smallest since July

March 1, 2012

While Euroland’s manufacturing purchasing managers index nudged 0.2 points higher to a reading in February of 49.0, the comparable U.S. measure unexpectedly fell back 1.7 points to 52.4, which is close to the 2H11 average of 52.25.  Being comfortably above 50, that still conveys a picture of expansion but at a decelerating pace.  The index was weighed down by drops of 2.7 points and 1.1 points in the sub-components for new orders and employment.  Over in Euroland, manufacturing continued to contract but only moderately on the whole.  With output in fact expanding, there is a sense that conditions may be stabilizing instead of spiraling downward into a prolonged recession.  More ominously, a wide diversity of conditions persists, and resurgent input price pressures could put the region’s fragile economy in even greater jeopardy.  While Holland, Germany, France, and Ireland posted neutral readings of 50.3, 50.2, 50.0 and 49.7 in their manufacturing PMIs, Italy and Spain shot recessionary scores of 47.8 and 45.0.  And with a record low of 37.7, Greece has gone from a very intense recession to something far worse, as misguided fiscal zealots slam on the brakes. 

Other soft U.S. data were reported today.  Construction spending dipped 0.1% in January, and real personal consumption was unchanged for a third straight month.  On the other hand, jobless insurance claims last week stayed very low at 351K, producing a four-week average of 354K following 375.8K in the prior four weeks.  Back in late summer, jobless claims ran just below 420K during the four weeks to September 10.  Also, initially reported auto sales reports for February have been on the high side of expectations.

Mfg PMIs U.S. Euroland Spread EUR/USD
Feb 2008 47.6 52.3 -4.7 1.475
March 48.3 52.0 -3.7 1.553
April 48.8 50.7 -1.9 1.574
May 49.8 50.6 -0.8 1.555
June 50.0 49.2 +0.8 1.557
July 49.2 47.4 +1.8 1.577
August 44.8 47.6 -2.8 1.497
September 44.8 45.0 -0.2 1.437
October 38.9 41.1 -2.2 1.331
November 36.5 35.6 +0.9 1.268
December 33.1 33.9 -0.8 1.351
Jan 2009 34.9 34.4 +0.5 1.326
February 35.6 33.5 +2.1 1.303
March 36.0 33.9 +2.1 1.306
April 39.8 36.8 +3.0 1.318
May 42.0 40.7 +1.3 1.365
June 45.8 42.6 +3.2 1.401
July 49.2 46.3 +2.9 1.409
August 53.5 48.2 +5.3 1.426
September 54.2 49.3 +4.9 1.455
October 53.9 50.7 +3.2 1.489
November 54.3 51.2 +3.1 1.491
December 55.8 51.6 +4.2 1.459
Jan 2010 56.7 52.4 +4.3 1.409
February 55.8 54.2 +3.6 1.368
March 59.3 56.6 +2.7 1.356
April 59.0 57.6 +1.4 1.342
May 58.8 55.8 +3.0 1.255
June 56.0 55.6 +0.4 1.220
July 55.7 56.7 -1.0 1.278
August 57.4 55.1 +2.3 1.288
September 56.4 53.7 +2.7 1.308
October 57.0 54.6 +2.4 1.389
November 58.0 55.3 +2.7 1.368
December 57.3 57.1 +0.2 1.323
Jan 2011 59.9 57.3 +2.6 1.337
February 59.8 59.0 +0.8 1.365
March 59.7 57.5 + 1.7 1.400
April 59.7 58.0 +1.7 1.445
May 54.2 54.6 -0.4 1.433
June 55.8 52.0 +3.8 1.438
July 51.4 50.4 +1.0 1.423
August 52.5 49.0 +3.5 1.435
September 52.5 48.5 +4.0 1.377
October 51.8 47.1 +4.7 1.371
November 52.2 46.4 +5.8 1.356
December 53.1 46.9 +6.2 1.316
January 54.1 48.8 +5.3 1.290
February 52.4 49.0 +3.4 1.323

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

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