Smallest U.S. Service Sector Advantage against Euroland since July 2011
October 3, 2013
The U.S. non-manufacturing purchasing managers index fell 4.2 points to a 3-month low and was three points weaker than forecast for the month of September. The euro area PMI, in contrast, climbed 1.5 points to a 27-month high of 52.2 and surpassed original market expectations by a full point. As a result of these divergences, the 2.2-point U.S.-minus-Euroland differential narrowed 5.7 points and was the smallest spread since July 2011. The sum of the services and manufacturing PMI spreads, shown in the right-most column below, decreased to a 3-month low of +7.3 in September.
The U.S. report featured on-month declines in the sales and jobs components of 7.1 points to 55.1 and 4.3 points to 52.7, respectively. Inflation heated up, with a price component well above 50 at 57.2 and 3.8 points higher than its reading in August. Orders prove comparatively resilient, printing at 59.6 after 60.5 in August.
This was the second consecutive month in which service-sector activity expanded in the euro area following 18 consecutive months of contraction. Germany, France, Italy and Ireland recorded readings above 50, whereas Spain’s index fell under that threshold to 49.0. A reading in Spain of 50.4 had been the first above 50 since June 2011.
| PMIs | U.S. | Ezone | U.S. | Ezone | Sum of | ||
| Services | Services | Spread | Mf’g | Mf’g | Spread | Spreads | |
| Jan 2012 | 56.8 | 50.4 | +6.4 | 54.1 | 48.8 | +5.3 | +10.9 |
| Feb | 56.1 | 48.8 | +7.3 | 51.9 | 49.0 | +2.9 | +10.2 |
| March | 55.0 | 49.2 | +5.8 | 53.3 | 47.7 | +5.6 | +11.4 |
| April | 53.7 | 46.9 | +6.8 | 54.1 | 45.9 | +8.2 | +15.0 |
| May | 54.1 | 46.7 | +7.4 | 52.5 | 45.1 | +7.4 | +14.8 |
| June | 52.7 | 47.1 | +5.6 | 50.2 | 45.1 | +5.1 | +10.7 |
| July | 52.9 | 47.9 | +5.0 | 50.5 | 44.0 | +6.5 | +11.5 |
| August | 54.3 | 47.2 | +7.1 | 50.7 | 45.1 | +5.6 | +12.7 |
| Sept | 55.2 | 46.1 | +9.1 | 51.6 | 46.1 | +5.5 | +14.6 |
| October | 54.8 | 46.0 | +8.8 | 51.7 | 45.4 | +6.3 | +15.1 |
| November | 54.8 | 46.7 | +8.1 | 49.9 | 46.2 | +3.7 | +11.8 |
| December | 55.7 | 47.8 | +7.9 | 50.2 | 46.1 | +4.1 | +12.0 |
| Jan 2013 | 55.2 | 48.6 | +6.6 | 53.1 | 47.9 | +5.2 | +11.8 |
| February | 56.0 | 47.9 | +8.1 | 54.2 | 47.9 | +6.3 | +14.4 |
| March | 54.4 | 46.4 | +8.0 | 51.3 | 46.8 | +4.5 | +12.5 |
| April | 53.1 | 47.0 | +6.1 | 50.7 | 46.7 | +4.0 | +10.1 |
| May | 53.7 | 47.2 | +6.5 | 49.0 | 48.3 | +0.7 | +7.2 |
| June | 52.8 | 48.3 | +4.5 | 50.9 | 48.8 | +2.1 | +6.6 |
| July | 56.0 | 49.8 | +6.2 | 55.4 | 50.3 | +5.1 | +11.2 |
| August | 58.6 | 50.7 | +7.9 | 55.7 | 51.4 | +4.3 | +12.2 |
| Sept | 54.4 | 52.2 | +2.2 | 56.2 | 51.1 | +5.1 | +7.3 |
Copyright 2013, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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