Globally Weighted PMI Improves in January

With all the global PMI reports in the books we can better gauge the health of the global economy.  The January data was overwhelmingly positive.  The January globally weighted PMI comes in at 51.8, up from 50.5 in December.  The biggest improvements came from the Eurozone, USA, China, Japan and Brazil.  There was some deterioration in India, but the country remained well in the contraction range over 50.

All in all, this points to a healthier global economy and a clear move back into the expansionary period after the 2012 dip into contraction range.  Here’s a brief breakdown of some of the more important components:

  • Eurozone:  47.9, UP from 46.1.
  • USA: 55.8, UP from 54.
  • China: 52.3, UP from 51.5.
  • India: 53.2, DOWN from 54.7.
  • Japan: 47.7, UP from 45
  • Russia: 52, UP from 50.
  • Brazil: 53.2, UP from 51.1.

(Chart via Orcam Group)






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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • Conventional Wisdumb

    Thank you!

  • Andrea Malagoli

    Pop the champagne! Problem solved!
    Dow 20,000 …

  • Tradeking13

    Looks like lower highs and lower lows.

  • Cowpoke

    How does Global PMI effect local economies?
    Example, I have a business where I buy a product to sell locally in the states here. I Buy it from a local importer then mark it up to sell wholesale to a retail outlet that sells retail to public.

    Now, I switch and go directly to China and bypass the wholesaler and by mfg product directly from them.

    Am I affecting GLOBAL PMI at all or am I simply putting more cash in my local community?

  • Cowpoke

    Oops I mean bypass the Importer.

  • Boston Larry

    Aren’t we overdue for some bad economic news? It has been such a long time, I’m getting nostalgic for it.

  • PasserBy

    How much can we rely on this to be a real signal of economic health when we have seen this same type of ramp around this time for 4 years in a row now, only to have it make lower lows in the summer?

  • Cowpoke

    Yes, Kinda crazy, Unemployment ticks up 8.5 Million have left the Job force and up we go because last few months jobs numbers were revised UP. So I guess the mkt is in Pick The News for Up/Risk Off Mode.
    I dunno..

  • Conventional Wisdumb


    Wasn’t a negative GDP print considered bad news at one time?

  • barak

    the last comment caught my attention. there are two possible reasons that affect seasonal adjustments that might contribute to this:
    1. the 2008 crisis was peaking around this time so the comparisons look better than they actually are.
    2. the last two winters were very mild which contributes to higher than usual activity in the winter.

    i guess the first reason contributed mostly to the anomaly in 2010-2011, and the second to the anomalies (pmi’s not in sync with fed reports) that we see today.

  • Gary_UK

    Spot on Passerby.

    Cullen has an optimistic bias it seems. I wonder why?

    The trend is clearly down, over the past 2 years, and it is a safe bet this year will be worse than the previous two, because there is no recovery.

    Recession for America dead ahead. Despite it being disallowed here!

  • perpetual neophyte

    Gary_UK – If there was a prize for persistence among commenters on this blog, you would win it. Why? Because you appear to have been visiting this site for a couple of years without ever reading or comprehending Cullen’s articles.

    “Recession for America dead ahead. Despite it being disallowed here!” That doesn’t make any sense. CR has repeatedly discussed being cautious when the data and his analysis confirm it and dismissed calls for recession when they did not.

    A recession call is not “disallowed here.” It’s just not called for when the data – by CR’s interpretation – doesn’t support it. I’m pretty confident that you’ve been predicting a recession longer than Achuthan. Timing matters.

  • Gary_UK

    Well, he’s going to proved wrong very shortly, it was a wonderful irony we saw contraction in Q4 just a few days after Cullen’s trumpet-blowing.

    You too must use the same opticians, dealing in rose-coloured spectacles?

  • Cullen Roche

    I’ll happily admit if I am wrong. I personally don’t see a recession in the data currently, but if it happens I’ll certainly admit as much. I’m not immune to being wrong or embracing when I am wrong….

  • hangemhi

    “the trend is clearly down” Totally disagree. Defense spending was down and just about everything else was up in Q4. I certainly think caution is in order because we still have spending cuts slated, but virtually everything else is “clearly” trending up. We’re light years away from doing a victory dance on behalf of the economy because of the know-nothing Congress and because private sector debt is still high, but with interest rates where they are today debt PAYMENT to income ratio’s are where they were in 1983. Debt itself to income is back to around 2003 or so. There are also something like 4 million fewer homes under water this year than last, and another 4 million expected to have equity this year with home prices trending higher.

    I think there is much more chance of upside surprises than downside – with Congress as the caveat.

  • Anonymous

    Check out Rosenbergs reading of the employment report for some clarity, at Zh today.