US: Economy is doing better – ABN AMRO

Han de Jong, chief economist at ABN AMRO, points out that the US economy is clearly enjoying more growth momentum than the Eurozone, but the manufacturing sector there is also weakening.

Key Quotes

“The preliminary manufacturing PMI in the US fell to 50.0 in July, from 50.6 in June. Momentum in services rose as the PMI in that sector came in at 52.2, from 51.5.”

“Durable goods orders were strong in June, although data for the previous month were revised down. Total durable goods orders were up 2.0% mom in June, after falling 2.3% in May.”

“There are several reasons why the US economy is holding up so much better than the eurozone. One is that the US economy is still benefitting from the tax cuts implemented last year. The effects, however, will soon fade.”

“More important is that the US economy is considerably less open than the eurozone economy, reducing the US’s vulnerability to the weakness in global trade growth.”