U.S. Minus Euroland PMI-Mf’g Spread Nearly Doubled
February 1, 2010
Although the pace of manufacturing activity accelerated in January in both Euroland and the United States and outperformed expectations in each case, the improvement was considerably more dramatic in the United States and resulted in a near doubling of the PMI spread to 6.0 points in January. The U.S. reading of 58.4 constituted a 65-month high, whereas Euroland’s 52.4 score was at only a two-year peak. Activity in the U.S. was much livelier than in Euroland’s weakest links such as Spain (45.3), Ireland (48.1) and Greece (48.6) and even more robust than in France (55.4), the Netherlands (54.8), Germany (53.7) or Italy (51.7). The production and new orders elements of the U.S. report were both above 65.0, and jobs jumped 3.1 points to a reading of 53.3 in an auspicious portent that Friday’s U.S. employment report may show an increase in jobs for the second time in three months.
U.S. manufacturing is still benefiting from a boost to competitiveness when the dollar sagged from 1.268 per dollar on average in November 2008 to a 1.491 on average a year later. However, 37% of that depreciation got reversed in the ensuing two months, and the greenback opened in February more than 1% additionally softer than its January mean value. A continuing dollar recovery points to narrower PMI-Mf’g spreads later this year.
Mf’g PMI’s | U.S. | Euroland | Spread | EUR/USD |
Feb 2008 | 48.8 | 52.3 | -3.5 | 1.475 |
March | 49.0 | 52.0 | -3.0 | 1.553 |
April | 48.6 | 50.7 | -2.1 | 1.574 |
May | 49.3 | 50.6 | -1.3 | 1.555 |
June | 49.5 | 49.2 | +0.3 | 1.557 |
July | 49.5 | 47.4 | +2.1 | 1.577 |
August | 49.3 | 47.6 | +1.7 | 1.497 |
September | 43.4 | 45.0 | -1.6 | 1.437 |
October | 38.7 | 41.1 | -2.4 | 1.331 |
November | 36.6 | 35.6 | +1.0 | 1.268 |
December | 32.9 | 33.9 | -1.0 | 1.351 |
Jan 2009 | 35.6 | 34.4 | +1.2 | 1.326 |
February | 35.7 | 33.5 | +2.2 | 1.303 |
March | 36.4 | 33.9 | +2.5 | 1.306 |
April | 40.4 | 36.8 | +3.2 | 1.318 |
May | 43.2 | 40.7 | +2.5 | 1.365 |
June | 45.3 | 42.6 | +2.7 | 1.401 |
July | 49.1 | 46.3 | +2.8 | 1.409 |
August | 52.8 | 48.2 | +4.6 | 1.426 |
September | 52.4 | 49.3 | +3.1 | 1.455 |
October | 55.2 | 50.7 | +4.5 | 1.489 |
November | 53.7 | 51.2 | +2.5 | 1.491 |
December | 54.9 | 51.6 | +3.3 | 1.459 |
Jan 2010 | 58.4 | 52.4 | +6.0 | 1.409 |
Copyright Larry Greenberg 2010. All rights reserved. No secondary distribution without express permission.
Tags: euro area PMI, U.S. PMI