U.S./Euroland PMI-Services Differential Narrowed at Start of 2010
February 3, 2010
Last month, the U.S. economy improved relative to Euroland in service-sector industries as well as manufacturing. As the dollar strengthened, such was the sense of the two economies that investors had perceived. Both regions remain in a recovery stage as confirmed by the above-50 readings shown below in all four PMIs last month. The U.S. services PMI advanced 0.7 points, thanks to gains of 2.7 points to 54.7 in new orders and 1.0 points to 44.6 in the jobs component, which together outweighed a 1.0-point drop in business production. A 0.9 point drop in Euroland’s services PMI to 52.5 saw the Irish, Italian and French components decline by 3.9, 3.0, and 2.4 points while Spain’s index increased 3.8 points to 48.8. Euroland’s service sector advantage over the United States narrowed 1.8 points in January, while the U.S. advantage in manufacturing widened by 2.7 points. In the right-most column below, which displays the arithmetic sum of the service-sector and manufacturing PMI spreads (U.S. minus Ezone), a 4.5-point U.S. relative improvement constitutes the biggest monthly change in at least a year.
| PMIs | U.S. | Ezone | U.S. | Ezone | Sum of | ||
| Services | Services | Spread | Mf’g | Mf’g | Spread | Spreads | |
| Feb 2009 | 42.1 | 39.2 | +2.9 | 35.7 | 33.5 | +2.2 | +5.1 |
| March | 41.2 | 40.9 | +0.3 | 36.4 | 33.9 | +2.5 | +2.8 |
| April | 43.9 | 43.8 | +0.1 | 40.4 | 36.8 | +3.6 | +3.7 |
| May | 44.5 | 44.8 | -0.3 | 43.2 | 40.7 | +2.5 | +2.2 |
| June | 46.3 | 44.7 | +1.6 | 45.3 | 42.6 | +2.7 | +4.3 |
| July | 46.7 | 45.7 | +1.0 | 49.1 | 46.3 | +2.8 | +3.8 |
| August | 48.2 | 49.9 | -1.7 | 52.8 | 48.2 | +4.6 | +2.9 |
| Sept | 50.1 | 50.9 | -0.8 | 52.4 | 49.3 | +3.1 | +2.3 |
| October | 50.1 | 52.6 | -2.5 | 55.2 | 50.7 | +4.5 | +2.0 |
| November | 48.4 | 53.0 | -4.6 | 53.7 | 51.2 | +2.5 | -2.1 |
| December | 49.8 | 53.6 | -3.8 | 54.9 | 51.6 | +3.3 | -0.5 |
| Jan 2010 | 50.5 | 52.5 | -2.0 | 58.4 | 52.4 | +6.0 | +4.0 |
Copyright Larry Greenberg 2010. All rights reserved. No secondary distribution without express permission.
Tags: Dollar, Euro, PMI indices
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