Democrats Made Gains in U.S. Election and Service Sector PMI Surveys Show Euroland Recovery Gaining Broader Traction
November 5, 2025
Democrats swept the five most closely watched U.S. election contests, winning gubernatorial races in New Jersey and Virginia and the New York City mayoral race, allowing California congressional districts to be redrawn, and preventing a Republican effort to remove and replace three seats on the Pennsylvania state supreme court currently held by the Democratic majority. Although an off-year election, the results suggest more voters shifting away from MAGA rule than had appeared to be the case.
Euroland’s October composite purchasing managers index was revised slightly higher to 52.5, a 29-month high. The improvement was led by a 3-point leap in Germany’s service sector reading to a 29-month high of 54.6 but mitigated by France’s downward revision in the composite score to an 8-month low of 47.7. Excluding those two largest economies using the euro, the collective PMI reading was at a 30-month high, further affirming that not only is the pace of the region’s economic improvement faster, it is also enjoying broader participation. Composite PMI readings for Italy, Spain and Ireland were at 19-, 10- and 5-month highs.
Inflation seems under control, too, within the euro area. Producer prices in September dipped 0.1% on month and 0.2% year-on-year, and price indicators within the purchasing managers data were reasonably stable.
The British composite and service sector PMI readings of 52.2 and 52.3 were each at 2-month highs and above preliminary October estimates.
China’s composite and service sector PMIs, in contrast, slipped to 3- and 2-month lows of 51.8 and 52.6.
Sweden‘s composite and service PMI scores of 56.3 and 55.4 were lower than September’s 3-year peaks but still well into expansionary territory.
Despite a 2-month high in Australia‘s revised service sector purchasing managers index, the composite score (52.1) printed at a four-month low.
South Africa’s manufacturing PMI fell below the 50 neutral level to a 4-month low of 48.8.
Lebanon’s private PMI reading climbed 1.2 index points to a record high of 51.5.
The non-oil PMI of the United Arab Emirates fell 0.4 points to a 2-month low of 53.8.
Hong Kong’s private PMI score of 51.2 in October was the best in 11 months, and Singapore’s PMI improved to a 14-month high of 52.4.
Consumer price inflation in the Philippines held steady in October at September’s half-year high of 1.7%.
A 5.3% unemployment rate in New Zealand last quarter was its highest level since late 2016 and associated with tepid employment expansion.\
Indonesian GDP growth last quarter slowed to 1.4% from a quarterly gain of 4.0% in 2Q but was associated with little change in on-year growth of 5.04%, compared to 5.12% in 2Q and 4.95% year-on-year in the third quarter of 2024.
The 42k estimate by ADP of U.S. private sector jobs growth in October beat forecasts slightly and was accompanied by a slight upward revision to September’s increase to 29k.
Postscripts: U.S. service sector purchasing manager indices exceeded expectations. Revised composite and service Global S&P-compiled measures printed at 2-month highs of 54.6 and 54.8. The Institute of Supply Management’s service sector PMI jumped 2.4 points to 52.4, an 8-month peak, led by a 5.8-point improvement in the orders sub-index to 56.2.
With 2-1/3 hours left in the U.S. trading day, the dollar had suffered minimal losses this Wednesday of 0.3% against the yen and Australian dollar and 0.2% versus the Canadian dollar, kiwi and sterling. There had been no net change in the euro or Swiss franc since the prior day’s close. Other financial market moves were comparatively more significant. For example, 10-year sovereign debt yields were up seven basis points in the United States, four bps in Great Britain and two bps in the four major Euroland economies. Equities had tumbled 2.5% in Japan, 1.4% in Taiwan, and 0.6% in India but also risen 0.6% in Germany and 0.4% in Germany, Spain and Italy. All of those moves had been outperformed in the U.S. by the Nasdaq and Russell 2000, each with a rise exceeding 1.0%. The price of oil is 1.3% lower, while those of Bitcoin and gold are up by 2.5% and 0.9%.
Copyright 2025, Larry Greenberg. All rights reserved.
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