U.S.-Euroland Manufacturing PMIs Started to Converge Last Month
October 1, 2014
A lot of manufacturing products get traded, so manufacturing is much more sensitive to shifting exchange rates than other sectors of the economy. The dollar rose 7.0% between its average value in April and that posted in September. Time will tell if a 2.0 point narrowing of the manufacturing U.S.-minus-Ezone purchasing managers index differential last month reflected a lagged response to the dollar’s upswing and concurrent euro downswing.
The U.S. index declined 2.4 points to a three month low, but at 56.6 such still implies a pretty robust rate of expansion. Indeed, August’s results were so high, they in retrospect look like an aberration. So, for instance, the orders sub-index in September of 60.0 is quite elevated yet 6.7 points below August’s 66.7 reading. The jobs index fell by 3.5 points, but production was 0.1% higher at 64.5.
Euroland’s manufacturing PMI slid another 0.4 points to 50.3, connoting virtual stagnation. This was the lowest reading in 14 months. Austria, Germany, France and Greece posted sub-50 scores, meaning that their manufacturing sectors contracted last month, and Spain’s 52.6 was its lowest score in seven months.
| Mfg PMIs | U.S. | Euroland | Spread | EUR/USD |
| Jan 2013 | 53.1 | 47.9 | +5.2 | 1.330 |
| February | 53.1 | 47.9 | +5.2 | 1.334 |
| March | 51.5 | 46.8 | +4.7 | 1.295 |
| April | 50.0 | 46.7 | +3.3 | 1.301 |
| May | 50.0 | 48.3 | +1.7 | 1.299 |
| June | 52.5 | 48.8 | +3.7 | 1.319 |
| July | 54.9 | 50.3 | +4.6 | 1.309 |
| August | 56.3 | 51.4 | +4.9 | 1.331 |
| September | 56.0 | 51.1 | +4.9 | 1.335 |
| October | 56.6 | 51.3 | +5.3 | 1.364 |
| November | 57.0 | 51.6 | +5.4 | 1.349 |
| December | 56.5 | 52.7 | +3.8 | 1.370 |
| Jan 2014 | 51.3 | 54.0 | -2.7 | 1.361 |
| February | 53.2 | 53.2 | 0.0 | 1.366 |
| March | 53.7 | 53.0 | +0.7 | 1.380 |
| April | 54.9 | 53.4 | +1.5 | 1.380 |
| May | 55.4 | 52.2 | +3.2 | 1.374 |
| June | 55.3 | 51.8 | +3.5 | 1.360 |
| July | 57.1 | 51.8 | +5.3 | 1.354 |
| August | 59.0 | 50.7 | +8.3 | 1.332 |
| September | 56.6 | 50.3 | +6.3 | 1.290 |
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
ShareThis
