Activity Gap Widened Last Month Between U.S. and Ezone
September 6, 2012
The ISM U.S. purchasing manager index in non-manufacturing increased 1.1 points to 53.7 in August, whereas Euroland’s services PMI fell by 0.7 points to a score of 47.2. The 6.5-point differential widened from a 7-month low in July to a 3-month high. This increasingly advantageous U.S. situation more than offset a 1.3-point decline in the U.S.-minus-Ezone manufacturing PMI spread, not just because of the comparative changes in the two differentials but also because service-sector activity represents a larger chunk of GDP than manufacturing. The sum of the two spreads, 10.5 points, represents the ninth time such has been larger than 10.0 points in the past ten months.
The U.S. overall services PMI increased 1.1 points in spite of lower readings for both sales and orders. The improvement mainly reflected a 9.4-point jump in the price conditions component and a 4.5-point gain in jobs.
Over in Europe, four of five reporting economies saw service sector activity contract in August. That’s what a sub-50 PMI score implies, and Germany (48.3), France (49.2), Italy (44.0) and Spain (44.0) had a 40-something reading. Ireland’s PMI, in contrast, rose 2.6 points to 51.7 and exceeded 50 for the first time since April.
| 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 |
| July | 52.6 | 47.9 | +4.7 | 49.8 | 44.0 | +5.8 | +10.5 |
| August | 53.7 | 47.2 | +6.5 | 49.6 | 45.1 | +4.5 | +11.0 |
Copyright 2012, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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