U.S.-Minus-Eurozone Factory PMI Remained Small in June

July 1, 2015

Strengthening growth in jobs powered a 0.7-point rise of the U.S. purchasing managers index to 53.5 in June, whereas Euroland’s PMI went up just 0.3 points to 52.5.  The PMI differential between those two economies was at a four-month high but only 1.0 point in width.

The U.S. jobs index leaped 3.8 points to 55.5.  By contrast, orders edged up just 0.2 points, and production dipped 0.5 points, signified slower output expansion than in May.  The prices subindex stayed marginally under the no change level at 49.5.

Among the eight individually reporting members of the eurozone, half saw higher PMI readings in June, and half experienced lower readings.  Those increasing were Germany by 0.8 points, France by 1.3 points, The Netherlands by 0.7 points and Austria by 0.9 points.  Those falling were Spain by 1.3 points, Greece by 1.1 points, Ireland by 2.5 points and Italy by 0.7 points.  All but Greece (46.9) had scores above the no-change threshold of 50, but France’s 50.7 signified a very weak rate of positive growth.

The euro on average was marginally firmer against the dollar in June than May.  That was the first month not to see the euro depreciate since March 2014.  Depreciation lifts import prices, and a big finding in the eurozone surveys was a diminishing deflationary risk.

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 54.3 53.2 +1.1 1.366
March 54.4 53.0 +1.4 1.380
April 55.3 53.4 +1.9 1.380
May 55.6 52.2 +3.4 1.374
June 55.7 51.8 +3.9 1.360
July 56.4 51.8 +4.6 1.354
August 58.1 50.7 +7.4 1.332
September 56.1 50.3 +5.8 1.290
October 57.9 50.6 +7.3 1.268
November 57.6 50.1 +7.5 1.247
December 55.1 50.6 +4.5 1.232
Jan 2015 53.5 51.0 +2.5 1.162
February 52.9 51.0 +1.9 1.135
March 51.5 52.2 -0.7 1.083
April 51.5 52.0 -0.5 1.081
May 52.8 52.2 +0.6 1.116
June 53.5 52.5 +1.0 1.123

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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