In June, U.S. and Eurozone PMI Trends Converged Somewhat
July 5, 2012
June purchasing manager survey results reflect a dramatic narrowing of the U.S. economy’s advantage over Euroland. The factory PMI spread fell 2.0 points to a 6-month low of 5.0, while the non-manufacturing PMI differential dropped 3.8 points to 4.6. The sum of these spreads, a gauge of U.S. superiority depicted in the right-most column plunged nearly 38% from 15.4 points to a nine-month low of +9.6 points. One might think this back swing of the pendulum heralds a rise of the euro. In fact, Europe’s relative improvement would not have been so pronounced without the euro’s depreciation, and central bank actions today are consistent with a weakening euro, not a reversal of its previous slide. For now, U.S. growth remains positive, and Euroland is experiencing a recession.
| PMIs | U.S. | Ezone | U.S. | Ezone | Sum of | ||
| Services | Services | Spread | Mf’g | Mf’g | Spread | Spreads | |
| Jan 2011 | 58.3 | 55.9 | +2.4 | 59.9 | 57.3 | +2.6 | +5.0 |
| Feb | 59.0 | 56.8 | +2.2 | 59.8 | 59.0 | +0.8 | +3.0 |
| March | 56.3 | 57.2 | -0.9 | 59.7 | 57.5 | +2.2 | +1.3 |
| April | 54.4 | 56.7 | -2.0 | 59.7 | 58.0 | +1.7 | -0.3 |
| May | 54.5 | 56.0 | -1.5 | 54.2 | 54.6 | -0.4 | -1.9 |
| June | 53.3 | 53.7 | -0.4 | 55.8 | 52.0 | +3.8 | +3.4 |
| July | 53.4 | 51.6 | +1.8 | 51.4 | 50.4 | +1.0 | +2.8 |
| August | 53.8 | 51.5 | +2.3 | 52.5 | 49.0 | +3.5 | +5.8 |
| Sept | 52.6 | 48.8 | +3.8 | 52.5 | 48.5 | +4.0 | +7.8 |
| October | 52.6 | 46.4 | +6.2 | 51.8 | 47.1 | +4.7 | +10.9 |
| November | 52.6 | 47.5 | +5.1 | 52.2 | 46.4 | +5.8 | +10.9 |
| December | 53.0 | 48.8 | +4.2 | 53.1 | 46.9 | +6.2 | +10.4 |
| Jan 2012 | 56.8 | 50.4 | +6.4 | 54.1 | 48.8 | +5.3 | +10.9 |
| Feb | 57.3 | 48.8 | +8.5 | 52.4 | 49.0 | +3.4 | +11.9 |
| March | 56.0 | 49.2 | +6.8 | 53.4 | 47.7 | +5.7 | +12.5 |
| April | 53.5 | 46.9 | +6.6 | 54.8 | 45.9 | +8.9 | +15.5 |
| May | 53.7 | 46.7 | +7.0 | 53.5 | 45.1 | +8.4 | +15.4 |
| June | 52.1 | 47.1 | +5.0 | 49.7 | 45.1 | +4.6 | +9.6 |
Copyright 2012, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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