PMIs: Sharp Relative Improvement in the U.S. Economy Between June and August
September 5, 2013
The sum of the U.S.-minus-Euroland service-sector and manufacturing purchasing manager index spreads was a full point greater than in July 5.6 points better than in June. At 12.2 points, the U.S. enjoyed its largest advantage vis-a-vis the euro area since last March. Improvement was wholly due to non-manufacturing developments.
The U.S. overall PMI of 58.6 was the best reading in over 5-1/2 years, 2.8 point better than in July, and propelled upward by increases of 3.0 points, 2.8 points and 1.8 points in jobs, orders and sales. Even better, inflation was considerably less intense with a 6.7-point decline to 53.4.
Euroland’s service sector reading of 50.7 was above the 50 no-change threshold for the first time since January 2012. Ireland, Germany, and Spain had above-50 scores that respectively represented a 78-month high, a 6-month high and an 26-month high. Italy’s reading of 48.8 was its slowest rate of contraction in 27 months. While Euroland is just emerging from recession and growing very slowly, the U.S. expansion seems to have progressed to a higher gear. There’s no room for the ECB to tighten. Anything short of Fed tapering at the September meeting would now create a big communications problem for the central bank.
| 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 |
| Jan 2013 | 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 |
| April | 53.1 | 47.0 | +6.1 | 50.7 | 46.7 | +4.0 | +10.1 |
| May | 53.7 | 47.2 | +6.5 | 49.0 | 48.3 | +0.7 | +7.2 |
| June | 52.8 | 48.3 | +4.5 | 50.9 | 48.8 | +2.1 | +6.6 |
| July | 56.0 | 49.8 | +6.2 | 55.4 | 50.3 | +5.1 | +11.2 |
| August | 58.6 | 50.7 | +7.9 | 55.7 | 51.4 | +4.3 | +12.2 |
Copyright 2013, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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