September Improvement of U.S. Manufacturing Exceeds Ezone’s Improvement
October 3, 2016
The U.S. manufacturing PMI reading last month of 51.5 was lower than Euroland’s score of 52.6. It was the eleventh time in the last fourteen months that such had happened. However, the differential between the two scores was halved.
After five straight readings above the 50 no change level, the U.S. Purchasing Managers Index had fallen to 49.5 in August, connoting a deterioration of activity at a very modest pace, but the PMI rose to 51.5 in September. This return to an expanding trend was led by a sharp 6-point increase in new orders and a 3.2-point rise in production. Both sub-components had fallen under 50 in August but rebounded back through that threshold last months.
While the U.S. PMI in manufacturing was increasing by 2.1 points, Euroland’s comparable measure climbed 0.9 points to 52.6. That increase was exceeded by the incremental improvement in the PMIs of France, Italy, and Austria. Germany’s PMI rose 0.9 points, and the PMIs of Greece, Ireland, and The Netherlands moved downward. Germany had the highest PMI in September (54.3), whereas both France (49.7) and Greece (49.2) posted scores that reflected a slow rate of manufacturing contraction.
Manufacturing activity is sensitive to changes in the EUR/USD exchange rate. But the monthly averages of EUR/USD in September and August were practically identical.
| 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 | 54.3 | 53.2 | +1.1 | 1.366 |
| March | 54.4 | 53.0 | +1.4 | 1.380 |
| April | 55.3 | 53.4 | +1.9 | 1.380 |
| May | 55.6 | 52.2 | +3.4 | 1.374 |
| June | 55.7 | 51.8 | +3.9 | 1.360 |
| July | 56.4 | 51.8 | +4.6 | 1.354 |
| August | 58.1 | 50.7 | +7.4 | 1.332 |
| September | 56.1 | 50.3 | +5.8 | 1.290 |
| October | 57.9 | 50.6 | +7.3 | 1.268 |
| November | 57.6 | 50.1 | +7.5 | 1.247 |
| December | 55.1 | 50.6 | +4.5 | 1.232 |
| Jan 2015 | 53.5 | 51.0 | +2.5 | 1.162 |
| February | 53.3 | 51.0 | +2.3 | 1.135 |
| March | 52.3 | 52.2 | +0.1 | 1.083 |
| April | 51.6 | 52.0 | -0.4 | 1.081 |
| May | 53.1 | 52.2 | +0.9 | 1.116 |
| June | 53.1 | 52.5 | +0.6 | 1.123 |
| July | 51.9 | 52.4 | -0.5 | 1.101 |
| August
September October |
51.0
50.0 49.4 |
52.3
52.0 52.3 |
-1.3
-2.0 -2.9 |
1.114
1.123 1.121 |
| November
December Jan 2016 February March April May June July August September |
48.4
48.0 48.2 49.5 51.8 50.8 51.3 53.2 52.6 49.4 51.5 |
52.8
53.2 52.3 51.2 51.6 51.7 51.5 52.8 52.0 51.7 52.6 |
-4.4
-4.8 -4.1 -1.7 +0.2 -0.9 -0.2 +0.4 +0.6 -2.3 -1.1 |
1.076
1.090 1.087 1.111 1.114 1.134 1.130 1.124 1.106 1.120 1.121 |
Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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