U.S. Service-Sector Purchasing Managers Survey Advantage Widened Last Month Versus Ezone

January 4, 2013

The U.S. and Ezone service-sector purchasing manager survey results for December were released today.  Each improved significantly from November readings.

The U.S. 56.1 reading was 1.4 points better than in November and above the 50 no change threshold and also above 55.0 for the first time in nine months.  Analysts had mistakenly expected the index to be a bit lower than the month before.  Improvement was paced by growth in jobs and orders.  Sales grew marginally more slowly but topped the 60 threshold for a second straight month. 

Euroland’s service-sector PMI almost kept pace with its U.S. counterpart, climbing 1.1 points, but a notable difference is that Euroland’s reading remained below 50, connoting a slower rate of contraction rather than a faster pace of expansion.  The German and Spanish indices leaped by 2.3 points and 1.9 points, while Italy’s PMI rose 1.0 point between November and December.  The Irish and French indices, by contrast, were slightly lower in December than November.  The differential between the U.S. and Ezone services PMIs was the second largest spread since February 2012. 

Manufacturing PMI surveys in December, which were released Wednesday and reviewed here, also revealed a greater U.S. advantage, equaling +4.6 points after a spread of 3.3 points in November.  The sum of the manufacturing and service-sector spreads, shown below in the rightmost column, has been wider than +10.0 points in 14 of the past 15 months.  This isn’t surprising given that the U.S. economy has been expanding for the past 3.5 years, while Europe is back in 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
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
Sept 55.1 46.1 +9.0 51.5 46.1 +5.4 +14.4
October 54.2 46.0 +8.2 51.7 45.4 +6.3 +14.5
November 54.7 46.7 +8.0 49.5 46.2 +3.3 +11.3
December 56.1 47.8 +8.3 50.7 46.1 +4.6 +12.9

In the day’s other releases, the U.S. jobless rate printed at 7.8% for the third time in four months during December.  The broad unemployment and underemployment rate remained at 14.4%.  The labor participation rate of 66.8% was also unchanged from November.  On-year growth in average hourly earnings accelerated to 2.1% from 1.7% in November and 1.6% in October.  There was another solid increase in jobs, 155K, and November’s total was revised upward by 15K to 161K.  The level of non-farm payroll jobs exceeded 134.0 million for the first time since December 2008.  Such expanded 160K per month in the second half of 2012 following a pace of 146K per month in both the second half of 2011 and the first half of last year.  Factory orders stagnated in November and were just 0.7% higher than a year earlier.  While the PMI and jobs reports were upbeat, factory orders were more sluggish than forecast.  Corporate investment hasn’t dovetailed with the recovery of the labor market.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

Tags: ,

ShareThis

This entry was posted on Friday, January 4th, 2013 at 9:35 am and is filed under Deeper Analysis. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

Comments are closed.

css.php