U.S. Advantage Versus Ezone in Service-Sector Activity Nearly Unchanged Last Month
April 4, 2013
The purchasing manager service-sector indices for the United States and Euroland fell by 1.6 points and 1.5 points, and their spread of 8.0 points was almost the same as in February at a wide 8.0 points. It was learned earlier this week that the manufacturing PMI differential had narrowed from 6.3 points in favor of the United States to 4.5 points. The 12.5 point sum of the two spreads has been above 10.0 every month since at least the start of 2012 as seen below. Euroland’s manufacturing index was below the 50 no-change threshold that entire time, and January 2012 was the last month to see the services Ezone index above 50.0. Such readings reflect a recession already getting long in the tooth yet with no sign yet of ending soon.
The Euroland service PMI readings last month ranged from a 49-month low of 41.3 in France, the second largest economy using the euro, to 52.3 in Germany, which nonetheless constitutes a seven-month low. The Italian and Spanish readings were better than February’s scores but only marginally above 45.0, thus attesting to rather sharp continuing contractions in the third and fourth biggest members. Germany’s 50.9, revised down from a preliminary indication of 51.6 and a score of 55.7 as recently as January, showed that the main locomotive in the currency union may be screeching to a halt.
Back in the U.S.A,, the expansion is not in jeopardy. The first-quarter average services PMI score was very respectable at 55.2. GDP growth will not be as robust, however, as that reading would suggest. Between February and March, the subindices for sales, orders, and prices fell by 0.4, 3.6, and 5.8 points. The jobs component also slumped 3.6 points, suggesting that weaker-than-anticipated labor market from the ADP and a leap in jobless insurance claims last week may not be entirely an abnormality caused by holiday-distorted seasonals.
| PMIs | U.S. | Ezone | U.S. | Ezone | Sum of | ||
| Services | Services | Spread | Mf’g | Mf’g | Spread | Spreads | |
| Jan 2012 | 56.8 | 50.4 | +6.4 | 54.1 | 48.8 | +5.3 | +10.9 |
| Feb | 56.1 | 48.8 | +7.3 | 51.9 | 49.0 | +2.9 | +10.2 |
| March | 55.0 | 49.2 | +5.8 | 53.3 | 47.7 | +5.6 | +11.4 |
| April | 53.7 | 46.9 | +6.8 | 54.1 | 45.9 | +8.2 | +15.0 |
| May | 54.1 | 46.7 | +7.4 | 52.5 | 45.1 | +7.4 | +14.8 |
| June | 52.7 | 47.1 | +5.6 | 50.2 | 45.1 | +5.1 | +10.7 |
| July | 52.9 | 47.9 | +5.0 | 50.5 | 44.0 | +6.5 | +11.5 |
| August | 54.3 | 47.2 | +7.1 | 50.7 | 45.1 | +5.6 | +12.7 |
| Sept | 55.2 | 46.1 | +9.1 | 51.6 | 46.1 | +5.5 | +14.6 |
| October | 54.8 | 46.0 | +8.8 | 51.7 | 45.4 | +6.3 | +15.1 |
| November | 54.8 | 46.7 | +8.1 | 49.9 | 46.2 | +3.7 | +11.8 |
| December | 55.7 | 47.8 | +7.9 | 50.2 | 46.1 | +4.1 | +12.0 |
| January | 55.2 | 48.6 | +6.6 | 53.1 | 47.9 | +5.2 | +11.8 |
| February | 56.0 | 47.9 | +8.1 | 54.2 | 47.9 | +6.3 | +14.4 |
| March | 54.4 | 46.4 | +8.0 | 51.3 | 46.8 | +4.5 | +12.5 |
Copyright 2013, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
ShareThis
