U.S. Manufacturing Edge Versus Euro Area Increased Last Month
February 1, 2019
The ISM-compiled U.S. manufacturing purchasing managers index rose 2.3 index points in January, while IHS-compiled counterpart fell 0.9 points. Consequently, the differential between these two data series, which had narrowed from 7.0 points in November to 2.9 index points in December, ballooned back to 6.1 points in January. This strong U.S. advantage exists in spite of an appreciating dollar. From its average value in February-March 2018 to its mean value last month, the dollar rose about 8% against the euro, which other things being equal would have augmented the price competitiveness of Euroland manufactured goods vis-a-vis U.S. products. A large share of manufactured goods end up as exports.
The 2.3-point rise of the U.S. PMI was led by increases of 6.4 points in production and 6.9 points in orders but restrained by a 5.3-point decline in the subset for prices, which dipped into outright contractionary territory with a January value of 49.6.
Only two of seven individual reporting members of the euro area — Spain and France — had a higher January PMI reading than December score. With a PMI of 47.8, representing a 68-month low, Italy had the bloc’s weakest manufacturing sector. The German PMI was also below the 50 no-change level and, at 49.7, constitutes a 50-month low. The Greek PMI was is lowest since October, and the Austrian, Dutch, and Irish PMIs were at 29-, 28, and 27-month lows.
There were other strong U.S. economic reports released today. Non-farm payroll employment leaped 304K in January and some 800K over the past three months. In each of those three months, moreover, average hourly earnings recorded on-year growth above 3.0%, including 3.2% in January, and the unemployment rate over that span averaged 3.9% despite a rising rate of labor force participation. Separately, construction spending growth of 0.8% on month in November was four times the rise that analysts were expecting. Finally, the final U. Michigan estimate of consumer confidence was revised half a point higher than its preliminary reading, although at 91.2 such was considerably down from 98.3 in December and a reading of 95.7 a year ago.
| 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 October November December Jan 2017 February March April May June July August September October November December Jan 2018 February March April May June July August September October November December Jan 2019 |
48.4
48.0 48.2 49.7 51.7 50.7 51.0 52.8 52.8 49.4 51.7 52.0 53.5 54.5 56.0 57.6 56.8 55.3 55.5 56.7 56.5 59.3 60.2 58.5 58.2 59.3 59.1 60.7 59.3 57.9 58.7 60.0 58.4 60.8 59.5 57.5 58.8 54.3 56.6 |
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 55.2 55.4 56.2 56.7 57.0 57.4 56.6 57.4 58.1 58.5 60.1 60.6 59.6 58.6 56.6 56.2 55.5 54.9 55.1 54.6 53.2 52.0 51.8 51.4 50.5
|
-4.4
-4.8 -4.1 -1.5 +0.1 -1.0 -0.5 0.0 +0.8 -2.3 -0.9 -1.5 -0.2 -0.4 +0.8 +2.2 +0.6 -1.4 -1.5 -0.7 -0.1 +1.9 +2.1 0.0 -1.9 -1.3 -0.5 +2.1 +2.7 +1.7 +3.2 +5.1 +3.3 +6.2 +6.3 +5.5 +7.0 +2.9 +6.1 |
1.076
1.090 1.087 1.111 1.114 1.134 1.130 1.124 1.106 1.120 1.121 1.103 1.078 1.054 1.063 1.064 1.069 1.072 1.106 1.124 1.153 1.182 1.191 1.176 1.174 1.184 1.220 1.234 1.234 1.227 1.181 1.167 1.169 1.155 1.166 1.148 1.136 1.138 1.142
|
Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Manufacturing PMIs
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