Global| Dec 16 2008MFG and Services Indices Drop to New Lows
Summary
The Markit PMI FLASH indices for the MFG and Services sectors show that deterioration continues. Both are on lows for the period that the services index has been available. The drop this month was much smaller than last month’s drop. [...]
The Markit PMI FLASH indices for the MFG and Services sectors
show that deterioration continues. Both are on lows for the period that
the services index has been available.
The drop this month was much smaller than last month’s drop.
Still the result tells us that month-to-month conditions that already
are weak are getting worse. That’s a bad sign. Still the ECB’s Trichet
says the decision for the next meeting is no foregone conclusion. How
bad are things?
The manufacturing index began in June 1997, the Services
series began in July 1998. Both are on all time lows for their
respective periods.
The EMU indices are available for a shorter period than the US
measure at least for MFG. And since the US MFG measure is already
extremely low in its longer term range we might surmise that the level
of distress indicated by this shorter lived EMU index is in fact
comparable to some of the extremely weak periods of its past using its
tracking with the US index as a reason for the conclusion. Already many
EMU measure are extremely weak. The US MFG PMI that goes back to 1950
finds the current (Nov) US index is weaker only 1.6% of the time. Is
Europe that bad off too? If so is this anyplace for the ECB to halt
cutting rates? Just a thought.
| FLASH Readings | ||
|---|---|---|
| Markit PMIs for the E-Zone-13 | ||
| MFG | Services | |
| Dec-08 | 34.47 | 42.05 |
| Nov-08 | 35.58 | 42.47 |
| Oct-08 | 41.10 | 45.76 |
| Sep-08 | 44.97 | 48.44 |
| Averages | ||
| 3-Mo | 40.55 | 44.10 |
| 6-Mo | 44.29 | 46.16 |
| 12-Mo | 48.07 | 48.73 |
| 125-Mo Range | ||
| High | 60.47 | 62.36 |
| Low | 34.47 | 42.05 |
| % Range | 0.0% | 0.0% |
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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