Service-Sector PMIs Show Wider U.S. Advantage
May 6, 2014
The U.S. non-manufacturing purchasing managers index jumped by 2.1 points to an 8-month high of 55.2 in April. With Euroland’s equivalent measure rising just a point to 53.1, the differential between the two indices increased to 2.1 points from 1.0 point in March and negative 1.0 point in February. Considerably faster growth in U.S. sales and orders was mitigated by a slower growth rate in jobs.
All five reporting euro area members had a PMI above the 50 threshold between expansion and contraction, and rates of increases accelerated during April in four of the instances. The exception was a French service-sector PMI of only 50.4, down from 51.5 in March. When the euro area’s debt crisis was very acute, France and Germany tended to be the better-performing economies in the union. But France has now become the weakest link and unfortunately is also the second largest economy in the group.
The sum of the manufacturing and service-sector U.S.-minus-Ezone spreads, shown below in the right-most column, swung from negative 1.0 in February to +3.6 just two months later. At 1.6 points, the two economies are far more synchronized than last August when the differential was +12.1 points. Indeed, the spread exceeded 10.0 points without interruption for all of 2012 and during the first third of 2013.
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 | 54.8 | 47.9 | +8.1 | 53.1 | 47.9 | +5.2 | +13.3 |
March | 54.5 | 46.4 | +8.1 | 51.5 | 46.8 | +4.7 | +12.8 |
April | 53.8 | 47.0 | +6.8 | 50.0 | 46.7 | +3.3 | +10.1 |
May | 54.0 | 47.2 | +6.8 | 50.0 | 48.3 | +1.7 | +8.5 |
June | 53.4 | 48.3 | +5.1 | 52.5 | 48.8 | +3.7 | +8.8 |
July | 55.9 | 49.8 | +6.1 | 54.9 | 50.3 | +4.6 | +10.7 |
August | 57.9 | 50.7 | +7.2 | 56.3 | 51.4 | +4.9 | +12.1 |
Sept | 54.5 | 52.2 | +2.3 | 56.0 | 51.1 | +4.9 | +7.2 |
October | 55.1 | 51.6 | +3.5 | 56.6 | 51.3 | +5.3 | +8.8 |
November | 54.1 | 51.2 | +2.9 | 57.0 | 51.6 | +5.4 | +8.3 |
December | 53.0 | 51.0 | +2.0 | 56.5 | 52.7 | +3.8 | +5.8 |
Jan 2014 | 54.0 | 51.6 | +2.4 | 51.3 | 54.0 | -2.7 | -0.3 |
February | 51.6 | 52.6 | -1.0 | 53.2 | 53.2 | 0.0 | -1.0 |
March | 53.1 | 52.1 | +1.0 | 53.7 | 53.0 | +0.7 | +1.6 |
April | 55.2 | 53.1 | +2.1 | 54.9 | 53.4 | +1.5 | +3.6 |
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: U.S. and euro area PMIs