Services PMI Spread Between U.S. and Eurozone Widened Sharply in July

August 5, 2015

The ISM reported a 4.3-point increase in the U.S. non-manufacturing purchasing managers index (PMI) to 60.3, highest since November.  Euroland’s services PMI, in contrast, fell 0.4 points last month to a two-month low.   The resulting PMI differential between the two economies therefore climbing to an 8-month high of 6.3.  This augmented U.S. advantage more than offset  the diminished advantage in manufacturing, whose spread fell by 0.7 points and resulted in a 4.0-point widening of the sum of the two spreads to 6.6 points, its greatest value so far this year.

The U.S. non-manufacturing PMI got large boosts in July from jobs, up 6.9 points to 59.6 and orders, up 5.5 points to 63.8.  Production went up 3.4 points to 64.9.  Any value in these diffusion indices that exceeds 50 connotes expanding activity, and the higher above 50, the faster is the rate of expansion.

In Euroland, four members reported national PMI services.  The German index stayed unchanged at 53.8.  France’s PMI dropped back 2.1 points to a 3-month low of 52.0 from a 46-month high of 54.1.  The Italian services PMI also was at 52.0 in July, a full point less than forecast and 1.4 points less than in June.  Spain’s service-sector PMI rose 3.6 points to a 3-month high of 59.7 to lead the group.

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 52.5 52.6 -0.1 54.3 53.2 +1.1 +1.0
March 53.7 52.1 +1.6 54.4 53.0 +1.4 +3.0
April 55.3 53.1 +2.2 55.3 53.4 +1.9 +4.1
May 56.1 53.2 +2.9 55.6 52.2 +3.4 +6.3
June 56.3 52.8 +3.5 55.7 51.8 +3.9 +7.4
July 57.9 54.2 +3.7 56.4 51.8 +4.6 +8.3
August 58.6 53.1 +5.5 58.1 50.7 +7.4 +12.9
Sept 58.1 52.4 +5.7 56.1 50.3 +5.8 +11.5
October 56.9 52.1 +4.8 57.9 50.6 +7.3 +12.1
November 58.8 51.1 +7.7 57.6 50.1 +7.5 +15.2
December 56.5 51.6 +4.9 55.1 50.6 +4.5 +9.4
Jan 2015 56.7 52.7 +4.0 53.5 51.0 +2.5 +6.5
February 56.9 53.7 +3.2 52.9 51.0 +1.9 +5.1
March 56.5 54.2 +2.3 51.5 52.2 -0.7 +1.6
April 57.8 54.1 +3.7 51.5 52.0 -0.5 +3.2
May 55.7 53.8 +1.9 52.8 52.2 +0.6 +2.5
June 56.0 54.4 +1.6 53.5 52.5 +1.0 +2.6
July 60.3 54.0 +6.3 52.7 52.4 +0.3 +6.6

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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