U.S.-Minus-Ezone Manufacturing PMI Differential Widened Last Month

October 1, 2012

The U.S. manufacturing purchasing managers index climbed back above the 50 no change level after three straight sub-50 readings, while Euroland’s counterpart stayed below the 50 threshold for a fourteenth straight month.  The spread between the two indices widened by 0.9 to 5.4 points.  The United States has enjoyed an advantage versus Euroland since August 2010, and the average size of the spread over the first eight months of 2012 was 5.8 points.

Analysts had predicted only a marginally improved overall U.S. index in September, not one of nearly two whole points.  The improvement would have been even larger had inventory growth not slowed sharply in September.  The sub-components for orders, prices, jobs, and production respectively increased by 5.2, 4.0, 3.1 and 2.3 points between August and September.

A 1.0-point rise in Euroland’s PMI was spearheaded by gains of 2.7 and 2.1 points in the German and Italian indices but mitigated by a 3.3-point slide in the French index to 42.7, signaling the fastest rate of contraction since April 2009.  The appreciation of EUR/USD since July may be a portent of an even wider U.S.-Ezone PMI differential in coming months.

Mfg PMIs U.S. Euroland Spread EUR/USD
Feb 2008 47.6 52.3 -4.7 1.475
March 48.3 52.0 -3.7 1.553
April 48.8 50.7 -1.9 1.574
May 49.8 50.6 -0.8 1.555
June 50.0 49.2 +0.8 1.557
July 49.2 47.4 +1.8 1.577
August 44.8 47.6 -2.8 1.497
September 44.8 45.0 -0.2 1.437
October 38.9 41.1 -2.2 1.331
November 36.5 35.6 +0.9 1.268
December 33.1 33.9 -0.8 1.351
Jan 2009 34.9 34.4 +0.5 1.326
February 35.6 33.5 +2.1 1.303
March 36.0 33.9 +2.1 1.306
April 39.8 36.8 +3.0 1.318
May 42.0 40.7 +1.3 1.365
June 45.8 42.6 +3.2 1.401
July 49.2 46.3 +2.9 1.409
August 53.5 48.2 +5.3 1.426
September 54.2 49.3 +4.9 1.455
October 53.9 50.7 +3.2 1.489
November 54.3 51.2 +3.1 1.491
December 55.8 51.6 +4.2 1.459
Jan 2010 56.7 52.4 +4.3 1.409
February 55.8 54.2 +3.6 1.368
March 59.3 56.6 +2.7 1.356
April 59.0 57.6 +1.4 1.342
May 58.8 55.8 +3.0 1.255
June 56.0 55.6 +0.4 1.220
July 55.7 56.7 -1.0 1.278
August 57.4 55.1 +2.3 1.288
September 56.4 53.7 +2.7 1.308
October 57.0 54.6 +2.4 1.389
November 58.0 55.3 +2.7 1.368
December 57.3 57.1 +0.2 1.323
Jan 2011 59.9 57.3 +2.6 1.337
February 59.8 59.0 +0.8 1.365
March 59.7 57.5 + 1.7 1.400
April 59.7 58.0 +1.7 1.445
May 54.2 54.6 -0.4 1.433
June 55.8 52.0 +3.8 1.438
July 51.4 50.4 +1.0 1.423
August 52.5 49.0 +3.5 1.435
September 52.5 48.5 +4.0 1.377
October 51.8 47.1 +4.7 1.371
November 52.2 46.4 +5.8 1.356
December 53.1 46.9 +6.2 1.316
January 54.1 48.8 +5.3 1.290
February 52.4 49.0 +3.4 1.323
March 53.4 47.7 +5.7 1.320
April 54.8 45.9 +8.9 1.315
May 53.5 45.1 +8.4 1.280
June 49.7 45.1 +4.6 1.254
July 49.8 44.0 +5.8 1.230
August 49.6 45.1 +4.5 1.255
September 51.5 46.1 +5.4 1.286

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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