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Economy in Brief

EMU PMI Rises Strongly In November 
by Robert Brusca  December 3, 2009

In November the Services PMI rose to 53.04 from 52.58. The services PMI stands in the 63rd percentile of its range. As such it is stronger than the EMU commission index for the sector that is only in the 47th percentile of its range.

Among EMU nations France’s index is the relative strongest standing in the 81st percentile of its range. Ireland is the relative weakest with the services index standing in the 40th percentile of its range.

Interestingly the service sector has continued to improve with little or no improvement in consumer confidence (see bottom panel of table above).

The service sector is important since it is where most of the jobs are. Despite ongoing sector improvement consumers have simply not had their spirits lifted. In Germany the banks continue to be obstreperous about lending. In the UK the service sector is backing off. France is doing well but at the cost of its fiscal progress. To be sure the various counties of the e-Zone and of EU remain challenged. E-Zone lending has been slow to revive. But getting the service sector back on track is a key objective of mending the Euro-economy. That revival should fix a lot of what is wrong.
The improved economy pushed initial claims for unemployment insurance down to a 15-month low. The Labor Department indicated that during the latest week, which included the Thanksgiving holiday, claims fell to 457,000 from a downwardly revised 462,000 during the prior period. The figures are down from the recession peak of 674,000 claims reached in March. The four-week moving average of claims fell to 481,250 and the latest weekly figure was lower than Consensus expectations for and increase to 488,000 claims.

Markit Services Indices for EU/EMU
  Nov-09 Oct-09 Sep-09 3Mo 6Mo 12Mo Percentile
Euro-Area 53.04 52.58 50.86 52.16 49.46 45.81 63.8%
Germany 51.38 50.73 52.06 51.39 50.21 47.13 51.2%
France 60.87 57.71 53.16 57.25 52.29 47.96 81.5%
Italy 49.84 52.20 48.53 50.19 47.31 43.94 48.0%
Spain 46.13 47.74 46.39 46.75 44.60 39.90 54.8%
Ireland 46.80 47.37 45.46 46.54 45.16 39.85 40.8%
EU only              
UK (CIPs) 56.63 56.90 55.30 56.28 54.63 49.96 80.8%
EU Commission Indices for EU and EMU
EU Index Nov-09 Oct-09 Sep-09 3Mo 6Mo 12Mo Percentile
EU Services -9 -11 -11 -18.00 -20.67 -26.00 47.2%
EMU Nov-09 Oct-09 Sep-09 3Mo 6Mo 12Mo Percentile
Services -4 -7 -9 -6.67 -11.50 -18.96 36.2%
Cons Confidence -17 -18 -19 -18.00 -20.67 -21.31 47.2%
Consumer confidence by country
Germany-Ccon -19 -16 -19 -18.00 -22.00 -25.92 32.6%
France-Ccon -18 -21 -24 -21.00 -25.33 -29.92 47.5%
Ital-Ccon -17 -18 -16 -17.00 -17.17 -22.33 42.9%
UK-Ccon -8 -8 -10 -8.67 -12.67 -20.00 71.1%
percentile is over range since May 2000
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