Economy in Brief

In June, the S&P PMI composites improved in 6 of 25 countries and regional jurisdictions reporting in the table. Fifteen improved month-to-month in May and eleven improved month-to-month in April.

Over three months, 14 jurisdictions improved compared to their six-month averages. Over six months, 18 improved compared to their 12-month averages. Over 12 months, 14 improved compared to their average readings of 12-months ago.

The sequential averages show a significant trend toward improvement. However, monthly comparisons are not as upbeat.

In June, there was a relatively sharp increase in the number of jurisdictions with PMI values showing decline (PMI<50) as the raw count increased to 8 out of 25 from four in each of the two preceding months. The period averages have been showing fewer output declines with the number dropping from 9 over 12 months to 6 over six months and to 5 over three months. PMI readings below 50 had been becoming scarcer.

Average and median PMI reading had been improving with higher diffusion reported over six months compared to 12 months and another improvement over three months for the average but a step back for the median. Monthly there is no trend for the change, but the June readings are weaker than the April readings.

Queue percentile standings classify standings against all past readings expressed as a percentile positioning on data back to 2020. The average queue standing is in its 43.7 percentile while the median standing is at its 42.9 percentile. Only India and Egypt have queue percentile standings in their 80th and 90th percentile ranges. Spain manages a reading in its 70th percentile, Brazil comes close at a 69-percentile standing. But only eight of 25 percentile standings are above the 50% mark, which means above their historic median readings.

Unemployment in the EMU in May stayed at its cycle (and all-time) low of 6.4%. There is evidence of small backtracking in Germany, but that is modest backtracking. Trend unemployment is still low and broadly low across the EMU.

In May unemployment rates fell relative to April in Finland, Greece, and in the Netherlands- in each case the rate fell by one tenth of one percentage point. Unemployment rates rose month-to-month in Austria, Belgium, France, Luxembourg, and Portugal. The rate also rose in Europe’s non-EMU/EU member U.K., a rise of 0.2 percentage points.

However, across the 12-representative EMU members in the table, the median rank standing of the unemployment rates is in its 19th percentile, the average is in its 26.9 percentile – both rankings confirming low rates of unemployment. The weighted rate for all of the EMU is much lower because the coincidence of having all these rates at relative lows at the same is so unusual. Only Luxembourg has an unemployment rate that is strong, about its historic median (above a ranking of 50%). The lowest rankings are still below their respective 10 percentiles for Ireland, Italy, and France. In addition, the Netherlands, Germany, and Belgium have rankings below their 20th percentiles. While many measures showing industrial data have not done so well compared to their pre-covid levels, for unemployment rates across countries have unemployment rates below their January 2020 levels except for four countries: Austria, Belgium, Germany, and Finland. Luxembourg’s rate is unchanged.