U.S. Factory-Sector Advantage Improved Marginally Last Month

December 1, 2014

The differential between the U.S. and euro area manufacturing purchasing manager indices widened by 0.2 points further to 8.6 points in November.  Despite the slight improvement, America’s advantage was its greatest in at least two years even though the dollar posted its strongest average value against the euro in that period.

The U.S. PMI slipped 0.3 points to 58.7, as drops of 0.4 and 0.6 points in production and jobs growth outweighed a 0.2-point uptick in new business.

Euroland data showed all three of its biggest economies to be experiencing a contraction of manufacturing activity.  The German index fell 0.9 points to 49.5, a 17-month low.  The French index edged 0.1 lower to a 3-month low of 48.4, and Italy’s PMI held steady at October’s 17-month low of 49.0.  The risk is rising that this soft core will spread weakness to the peripheral economies.  To be sure, the fourth largest economy, Spain, posted an 89-month high in its factory PMI, 54.7.  But Austria (47.4) and Greece (49.1) also recorded sub-50 PMI scores, and Ireland’s 56.2 was at a 2-month low.  The Dutch PMI of 54.6 was at a 9-month high.

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
November 58.7 50.1 +8.6 1.247

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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