Non-Manufacturing Activity in the U.S. and Euro Area

January 5, 2017

The U.S. non-manufacturing purchasing managers index remained flat at 57.2 in December. Not since October 2015 has the NMI been higher than this level. In December, a 4.6-point improvement in the sub-index for new business to 61.6 was counterbalanced with a 4.4-point drop in jobs to a reading of 53.8. Along with today’s smaller-than-forecast ADP estimate that private jobs grew 153K last month, the slower expansion of jobs indicated in the NMI suggests that Friday’s monthly Labor Force Report could be disappointing.

Euroland’s services purchasing managers index improved 0.5 points to 54.4, the best reading in about 5-1/2 years. The French and Irish PMIs went up 1.3 points and 3.1 points to respective 3- and 4-month highs, but Germany’s services PMI fell 0.8 points to a 2-month low.

The U.S. still holds a comfortable  advantage in service sector activity relative to the euro area. It’s non-manufacturing PMI exceeds Euroland’s services PMI by 2.8 points, down from 3.3 points the month before. Euroland’s manufacturing PMI was a mere 0.2 points above the U.S. counterpart. The rightmost column below adds the two PMI differentials. That sum was +2.6 last month and ranged during calendar 2016 from -4.2 in January to +4.1 points in June.

PMIs U.S. Ezone U.S. Ezone Sum of
NonMfg 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 57.1 53.7 +4.4 52.3 51.0 +1.3 +5.7
March 56.9 54.2 +2.7 52.3 52.2 +0.1 +2.8
April 57.5 54.1 +3.4 51.6 52.0 -0.4 +3.0
May 55.9 53.8 +2.1 53.1 52.2 +0.9 +3.0
June 56.2 54.4 +1.8 53.1 53.1 0.0 +1.8
July 59.6 54.0 +5.6 51.9 52.4 -0.5 +5.1
August

Sept

October

58.3

56.7

58.3

54.4

53.7

54.1

+3.9

+3.0

+4.2

51.0

50.0

49.4

52.3

52.0

52.3

-1.3

-2.0

-2.9

+2.6

+1.0

+1.3

November

December

Jan 2016

February

March

April

May

June

July

August

September

October

November

December

56.6

55.8

53.5

53.4

54.5

55.7

52.9

56.5

55.5

51.4

57.1

54.8

57.2

57.2

54.2

54.2

53.6

53.3

53.1

53.1

53.3

52.8

52.9

52.8

52.2

52.8

53.9

54.4

 

+1.7

+1.6

-0.1

+0.1

+1.4

+2.6

-0.4

+3.7

+2.6

-1.4

+4.9

+2.0

+3.3

+2.8

48.4

48.0

48.2

49.5

51.8

50.8

51.3

53.2

52.6

49.4

51.5

51.9

53.2

54.7

52.8

53.2

52.3

51.2

51.6

51.7

51.5

52.8

52.0

51.7

52.6

53.5

53.7

54.9

-4.4

-5.2

-4.1

-1.7

+0.2

-0.9

-0.2

+0.4

+0.6

-2.3

-1.1

-1.6

-0.5

-0.2

-2.7

-3.6

-4.2

-1.6

+1.6

+1.7

-0.6

+4.1

+3.2

-3.7

+3.8

+0.4

+2.8

+2.6

Copyright 2017, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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