Wider U.S. Advantage in Factory Activity vis-a-vs Euroland
November 3, 2014
The euro area manufacturing purchasing managers index edged 0.3 of a point higher to 50.6 in October, but the U.S. PMI jumped 2.4 points to 59.0. The differential between these measures of factory-sector operating conditions, which had declined 2.0 points in September, more than reversed that move to reach a new multi-year high of 8.4 points last month. On a monthly average basis, the euro fell 2.2 cents or 1.7% relative to the dollar.
U.S. manufacturing was very robust in October. Improvement from conditions in the prior month mostly reflected a 5.8-point increase in orders. The measure of inflation settled back from a torrid reading of 59.1 in September to 53.5 in October, as commodity costs subside, especially for oil.
In Euroland, manufacturing conditions varied widely. The Netherland, Germany, Spain, and Ireland posted scores above the 50 level that separates contraction from expansion, while France, Italy, Greece, and Austria were below that threshold. Between September and October, the PMI measure increased in the Netherlands, Germany, and Ireland, meaning faster positive growth or a lessening rate of decline. Spain’s index didn’t change in October, and Austria, France, and Italy experienced lower scores than in September.
| Mfg PMIs | U.S. | Euroland | Spread | EUR/USD |
| Jan 2013 | 53.1 | 47.9 | +5.2 | 1.330 |
| February | 53.1 | 47.9 | +5.2 | 1.334 |
| March | 51.5 | 46.8 | +4.7 | 1.295 |
| April | 50.0 | 46.7 | +3.3 | 1.301 |
| May | 50.0 | 48.3 | +1.7 | 1.299 |
| June | 52.5 | 48.8 | +3.7 | 1.319 |
| July | 54.9 | 50.3 | +4.6 | 1.309 |
| August | 56.3 | 51.4 | +4.9 | 1.331 |
| September | 56.0 | 51.1 | +4.9 | 1.335 |
| October | 56.6 | 51.3 | +5.3 | 1.364 |
| November | 57.0 | 51.6 | +5.4 | 1.349 |
| December | 56.5 | 52.7 | +3.8 | 1.370 |
| Jan 2014 | 51.3 | 54.0 | -2.7 | 1.361 |
| February | 53.2 | 53.2 | 0.0 | 1.366 |
| March | 53.7 | 53.0 | +0.7 | 1.380 |
| April | 54.9 | 53.4 | +1.5 | 1.380 |
| May | 55.4 | 52.2 | +3.2 | 1.374 |
| June | 55.3 | 51.8 | +3.5 | 1.360 |
| July | 57.1 | 51.8 | +5.3 | 1.354 |
| August | 59.0 | 50.7 | +8.3 | 1.332 |
| September | 56.6 | 50.3 | +6.3 | 1.290 |
| October | 59.0 | 50.6 | +8.4 | 1.268 |
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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