U.S.-Minus-Ezone PMI Disadvantage Widened in February
The U.S. non-manufacturing purchasing managers index according to the Institute of Supply Management fell by 2.4% to 51.6 in February, which signaled the slowest rate of expansion since February. According to Markit Economics, Euroland’s services PMI rose 1.0 point to 52.6, a 32-month high. The resulting 3.4-point swing from a U.S.-minus-Euroland 2.4-point advantage in January to a 1.0-point disadvantage in February more than offset a concurrent improvement in the U.S.-minus-Ezone manufacturing PMI of 2.7 points from -2.7 to 0.0. The sum of the two first-difference calculations, shown in the right-most column below, reveals a U.S. disadvantage for a second straight month. As recently as August, the United States enjoyed a 12.1-point advantage. This relative shift over the past half year is consistent with the euro’s resilient tone against the dollar.
The 2.4-point drop in the U.S. services PMI was led by drops of 8.9 points in the jobs sub-component and 1.7 points in sales. The inflation component also declined and at 53.7 after 57.1 signaled lessening positive inflation.
Within the euro area, service-sector PMIs rose 3.5 points in Italy and 2.8 points in Germany, but fell in February by 4.0 points in Ireland, 1.7 points in France and 1.2 points in Spain. Ireland, Germany, Spain and Italy had higher PMI readings than the United States, while the French 47.2 score signaled a fourth straight month of contraction.
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| 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 | 51.6 | 52.6 | -1.0 | 53.2 | 53.2 | 0.0 | -1.0 |
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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