Opposite U.S. and Eurozone Purchasing Manager Trends

December 3, 2015

The sum of the U.S.-Minus-Euroland PMI spreads turned negative in November for the first time since January 2014.  Within the last four months, that combined differential swung 9.1 points in the eurozone’s favor from +6.6 to –2.5.  The cumulative swing since October 2014 has been 17.6 points.

The difference between the U.S. non-manufacturing PMI and Euroland’s services PMI fell by 3.3 points to +1.7 in November alone.  The U.S. index dropped 3.2 points to a six-month low of 55.9.  Production, orders, and jobs each declined by more than 4.0 points.  Price pressure, with a reading of 50.3 where 50.0 separates a rising from a falling trend, continued to be very subdued.

Euroland’s services PMI edged up 0.1 point to a 3-month high of 54.2.  Ireland’s 63.6 reading was at a 113-month high.  The German and Spanish PMIs were at 14- and 3-month highs, while Italy’s 53.4 score was the same as recorded in October.  Even France’s 51.0 reading, although down 0.3 points and at a 3-month low of 51.0 connotes positively growing activity and suggests that real GDP last quarter is apt to rise by 0.2%.  With composite eurozone PMI readings of 53.9 in October and 54.2 in November, it looks like the common currency area will achieve about 0.4% GDP growth in 4Q or somewhat between 1.5% and 2.0% on an annualized basis.

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 54.8 47.9 +8.1 53.1 47.9 +5.2 +13.3
March 54.5 46.4 +8.1 51.5 46.8 +4.7 +12.8
April 53.8 47.0 +6.8 50.0 46.7 +3.3 +10.1
May 54.0 47.2 +6.8 50.0 48.3 +1.7 +8.5
June 53.4 48.3 +5.1 52.5 48.8 +3.7 +8.8
July 55.9 49.8 +6.1 54.9 50.3 +4.6 +10.7
August 57.9 50.7 +7.2 56.3 51.4 +4.9 +12.1
Sept 54.5 52.2 +2.3 56.0 51.1 +4.9 +7.2
October 55.1 51.6 +3.5 56.6 51.3 +5.3 +8.8
November 54.1 51.2 +2.9 57.0 51.6 +5.4 +8.3
December 53.0 51.0 +2.0 56.5 52.7 +3.8 +5.8
Jan 2014 54.0 51.6 +2.4 51.3 54.0 -2.7 -0.3
February 52.5 52.6 -0.1 54.3 53.2 +1.1 +1.0
March 53.7 52.1 +1.6 54.4 53.0 +1.4 +3.0
April 55.3 53.1 +2.2 55.3 53.4 +1.9 +4.1
May 56.1 53.2 +2.9 55.6 52.2 +3.4 +6.3
June 56.3 52.8 +3.5 55.7 51.8 +3.9 +7.4
July 57.9 54.2 +3.7 56.4 51.8 +4.6 +8.3
August 58.6 53.1 +5.5 58.1 50.7 +7.4 +12.9
Sept 58.1 52.4 +5.7 56.1 50.3 +5.8 +11.5
October 56.9 52.1 +4.8 57.9 50.6 +7.3 +12.1
November 58.8 51.1 +7.7 57.6 50.1 +7.5 +15.2
December 56.5 51.6 +4.9 55.1 50.6 +4.5 +9.4
Jan 2015 56.7 52.7 +4.0 53.5 51.0 +2.5 +6.5
February 56.9 53.7 +3.2 52.9 51.0 +1.9 +5.1
March 56.5 54.2 +2.3 51.5 52.2 -0.7 +1.6
April 57.8 54.1 +3.7 51.5 52.0 -0.5 +3.2
May 55.7 53.8 +1.9 52.8 52.2 +0.6 +2.5
June 56.0 54.4 +1.6 53.5 52.5 +1.0 +2.6
July 60.3 54.0 +6.3 52.7 52.4 +0.3 +6.6
August

Sept

October

 59.0

56.9

59.1

 54.4

53.7

54.1

 +4.6

+3.2

+5.0

 51.1

50.2

50.1

 52.3

52.0

52.3

 -1.2

-1.8

-2.2

 +3.4

+1.4

+2.8
November 55.9 54.2 +1.7 48.6 52.8 -4.2 -2.5

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

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