Global| Jun 22 2018EMU and Japan; EMU Flash PMIs Make Small Recovery
Summary
PMIs in June in the EMU area showed some respite from the steady decline in recent months. Services PMIs showed some recovery as manufacturing has continued to slip. The gain in services has been enough to boost the overall PMI gauge. [...]
PMIs in June in the EMU area showed some respite from the steady decline in recent months. Services PMIs showed some recovery as manufacturing has continued to slip. The gain in services has been enough to boost the overall PMI gauge.
The rebound in June is limited and weak. It is confined to services. But the EMU, Germany and France each show a services PMI level in June above their respective three-month averages. Manufacturing is lower in these three jurisdictions in June and well below its respective three-month averages.
Still, the standings of these various PMI gauges remain moderate-to-weak. The EMU composite PMI has a 70th percentile standing with manufacturing at a 66th percentile standing and services at a 79th percentile standing. These are firm but moderate readings.
Germany, the usual strong economy in the EMU, has a composite PMI with a very low 27th percentile standing with services at a 29th percentile standing. German manufacturing has a 64th percentile standing.
France has a PMI standing at its 72nd percentile with manufacturing at its 66th percentile and services at the 75th percentile.
Japan's manufacturing gauge rose to 53.1 in June from 52.8 in May with a 79th percentile standing. Japan's June PMI level is above all of its period averages of three-month, six-month and 12-month.
Europe's readings continue to express growth but lack strength. Now we will see what the trade war does to them as the EU restrictions on U.S. imports kick in. We will have to see how the countermeasures emerge and if the trade war escalates. This week U.S. Commerce Secretary Wilbur Ross said that there would have to be more environmental pain before the U.S. would get the trade concessions it wants.
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
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