Big 5 PMI dips in September

I've taken a few days to comment on the latest S&P Global PMI data (the data were released last week).  Apologies.  I've been wrestling with some "real life" problems.

These are the preliminary ("flash") estimates for PMIs for September.    They cover about 80% of the panel respondents in each country/zone, and will be slightly revised when all the final responses are in.

The Big 5 average, which is weighted in my calculation by PPP (purchasing power parity) GDP, fell in September.  The Big 5 are : the USA, the Euro Zone (countries using the Euro as a currency), the UK, Japan and India.  Together they make up just more than 50% of world GDP.   I also extreme-adjust each time series before including it in the calculations.  Extreme-adjustment removes or attenuates sharp spikes in the underlying data to make it easier to see trends.  

Is this the beginning of a new mini-downturn?  I still think that Trump's tariff débâcle will slow world growth, especially in the US.  The underlying trend working in the opposite direction is that the world had started a recovery in the second half of last year as the effect of rising Central Bank discount rates wore off.   Plus, CB's have been cutting rates for the last year.  Since economies respond to falling interest rates with a 12 to 18 month lag, you would expect economies to be picking up steam now.  However, this recovery is being offset by the direct impact of the tariffs, and by the uncertainty of constant changes in policy.  In the US, in addition, food prices have been affected by the government's assault on undocumented immigrants.  Rising inflation in the US is likely to reduce consumer spending.

Except for India, which has its own strong boom going, manufacturing is down in all the economies.  Services are holding up better. 

The first fall for services, manufacturing and the average in six months

Here are the charts for each country/zone individually:

The US:

The US is still growing moderately, on these data, but services and manufacturing are both down on the month.  [Since PMI data are only available back to 2012, I have spliced the relevant ISM data to the PMI data to get continuous time series before 2012]

The Euro zone:

The Euro zone is recovering, but it's not booming (it's just above the 50% "recession line"), and the manufacturing PMI has turned down for the first time in many months.

The UK:

The UK is in trouble.  The average PMI is below the 50% "recession line", and it's falling.

Japan:

Note how it is just services which are holding up the Japanese economy.  Manufacturing is sliding.

India:

The boom in India is very obvious in the data (I've smoothed each time series with a 5-term centred linear moving average because Indian PMIs are quite "spiky" month-to-month).  

[Data sources: S&P Global and ISM, with my extreme-adjustment, moving averages and weighted totals/averages]