Germany – Slower Momentum in the Manufacturing Sector in Q2

The German industrial production index dropped in May bu -1.4% compared to April. Carryover growth for the second quarter is negative at -1.1%. It has to be compared to a 0.8% growth during the first quarter (non annualized figures)
3 remarks:1 – On the first chart we notice that the index is almost flat since the beginning of 2011. There is a strong divergence with the American one. Is there a problem of competitiveness in Germany? Continue reading

The US labor market in three charts

Three charts can characterized the US labor market.
The first graph shows that probably since April of this year the momentum of the market has changed. We see on the chart that from April the level of new jobs is systematically higher than the average of the previous three years. That was not the case during the first quarter. The scale has changed but this latter is consistent with other information such as ISM or PMI surveys. In other words, on companies’ side there is a recent but clear improvement in the outlook. Continue reading

Spain: A new momentum on the labor market

This chart shows that the economic momentum is changing in Spain. The number of unemployed drops quickly and month after month. The peak was in April 2013 and since then the number of unemployed has been reduced by more than 335 450. This change can be seen on the chart by looking at the blue bars. We clearly see that the business cycle dynamics has changed. Continue reading

World Economy – A slight improvement in 2 charts

The two charts at the bottom of this post give a synthetic vision of the world economy. They present the synthetic index of the PMI/Markit surveys made throughout the world. It is specific to the manufacturing sector. The main reason is that world trade is based on manufactured goods. This can give an intuition of how world trade could behave in the coming week or months.
The first chart put together large developed countries, a BRIC(*) index and the Markit emerging index. The second chart gives details for BRIC countries. Continue reading

USA – Can a rebound be expected in the second quarter? Yes probably

After the strong downward revision of the GDP estimate for the first quarter, can a rebound be expected during the second quarter?
The ISM survey can give part of the answer. The chart below compares the productivity index calculated by the Bureau of Labor Statistics and a measure of productivity taken from the ISM survey.
The two series are consistent and we see a rebound on the ISM measure during the second quarter. It is an indication that the drop seen in the first quarter was probably temporary and that the economic activity was better oriented during spring.

Euro Area – PMI Survey – The momentum is weaker and the horizon more foggy

The manufacturing index of the PMI/Markit survey is losing steam. Its peak was seen at the beginning of this year. This lack of momentum can also be perceived in the manufacturing part of the IFO survey in Germany and in the INSEE survey in France.
That’s what the first chart below shows. The level of the three index are different but the three profiles are consistent. For the three the short-term trend is on the downside.
We also see that the PMI index is close to its historical value (0 on the chart). It doesn’t reflect a strong momentum or a forthcoming robust impulse on economic momentum. Continue reading