As we covered a few days ago, looking just at the manufacturing PMIs it is clear that the Eurozone economy is looking much stronger than that of the US. So here’s a closer look at the surveys. Sometimes you see a surge in a particular economic indicator and it is not matched by equal or similar improvement in other indicators, so it is important to take a broader view. In this ChartBrief we look at the z-scores or normalized readings of 6 different surveys for the Eurozone and the USA.
A couple of things standout, first of all, the Eurozone strength is broad-based with virtually all of the surveys in agreement in terms of direction and magnitude. The composite of these surveys is notably at post-crisis highs, thus it is fair to say the Eurozone economy is looking good – the best it has in about 10 years. The US economic survey indicators have similarly seen a synchronized surge, but there are signs that it is starting to rollover as arguably things got a little over-hyped.
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The Eurozone economy is looking good based on a range of different economic sentiment surveys, as noted in the latest weekly report, and conditions look the best since the global financial crisis.
The various economic sentiment surveys for America underwent a big surge from a soft patch in early 2016 to multi-year highs on a number of metrics, but have now started to roll over.
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