Further Shrinkage of U.S. Economic Advantage against Euroland

January 6, 2014

The U.S. service-sector purchasing manager index fell 0.9 points to 53.0, a 17-month low.  Euroland’s comparable PMI slipped just 0.2 points, causing the differential between the two indices to drop to only 2.0 points, down from 7.9 points in August.  The sum of the non-manufacturing and manufacturing spreads, shown in the rightmost column below, was 6.3 points, about a half as wide as four months earlier.

The slower rate of improvement in the U.S. service sector mostly reflected the flow of new business, which contracted for the first time since July 2009.  The new orders sub-index of 49.4 was 7.0 points lower than November’s reading.

In Euroland, the German services PMI fell by 2.2 points to 53.5, and the French index slid another 0.2 points further below the 50 no change threshold to 47.8.  The Spanish and Irish indices jumped by 2.7 and 4.7 points, however, to 54.2 and 61.8, respectively. 

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
Sept 54.4 52.2 +2.2 56.2 51.1 +5.1 +7.3
October 55.4 51.6 +3.8 56.4 51.3 +5.1 +8.9
November 53.9 51.2 +2.7 57.3 51.6 +5.7 +8.4
December 53.0 51.0 +2.0 57.0 52.7 +4.3 +6.3

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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