U.S. Manufacturing Advantage over Ezone Extended in February
March 1, 2013
Purchasing manager survey data indicate that the United States last month enjoyed its widest advantage over the euro area since July, although such was just as good in October. The difference between the two indices is shown in the column below labeled “spread.” The U.S. reading of 54.2 was 1.1 points greater than in January and surpassed any of last year’s scores. Readings above 50 connote expanding activity. Alas, Euroland’s reading has been under 50.0 every month since August 2011 and was no higher in February than in January.
Faster growth in production and orders provided the bulk of the firepower for the improved U.S. index in February. The readings of 57.6 and 57.8 in those sub-categories were 4.0 and 4.5 points above January’s scores. Jobs, by contrast, fell by 1.4 points to a reading of 52.6. Inflationary pressure accelerated fairly significantly last month.
In the euro area, Germany (50.3) and Ireland (51.5) had readings above 50, but all other economies were below the no threshold. Most disturbing was France’s 43.9. Only Greece’s 43.0 was worse, but at least Greece hit that level on an upswing as it represents a nine-month high. Lessening financial market strains have not yet quite delivered Euroland from recession, and downturns in some of its members appear to be intensifying. Besides France, the second largest Ezone economy, Italy posted a 3-month low of 45.8, and Spain’s reading was 46.8. Italy and Spain are the group’s third and fourth biggest economies.
The contrast between the U.S. and Ezone reports pushed the euro below the $1.3000 threshold. A record Ezone jobless rate of 11.9% was also reported today, and inflation fell into target at 1.8%, increasing the chances of more stimulus from the ECB.
| Mfg PMIs | U.S. | Euroland | Spread | EUR/USD |
| January | 54.1 | 48.8 | +5.3 | 1.290 |
| February | 51.9 | 49.0 | +2.9 | 1.323 |
| March | 53.3 | 47.7 | +5.6 | 1.320 |
| April | 54.1 | 45.9 | +8.2 | 1.315 |
| May | 52.5 | 45.1 | +7.4 | 1.280 |
| June | 50.2 | 45.1 | +5.1 | 1.254 |
| July | 50.5 | 44.0 | +6.5 | 1.230 |
| August | 50.7 | 45.1 | +5.6 | 1.255 |
| September | 51.6 | 46.1 | +5.5 | 1.286 |
| October | 51.7 | 45.4 | +6.3 | 1.297 |
| November | 49.9 | 46.2 | +3.7 | 1.283 |
| December | 50.2 | 46.1 | +4.1 | 1.313 |
| January | 53.1 | 47.9 | +5.2 | 1.330 |
| February | 54.2 | 47.9 | +6.3 | 1.334 |
Copyright 2013, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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