There are two things to remember about the PMI readings: a number above 50.0 represents economic growth, and a number below 50.0 represents a decline in economic growth; and secondly, the trend is important.
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New York, NY (PRWEB) October 31, 2012
In a recent Investment Contrarians article, editor Sasha Cekerevac states that the Purchasing Managers’ Index (PMI) survey, run by the financial information company Markit, is a great gauge to understand the true level of economic growth around the world. And, according to Cekerevac, economic growth continues to elude the eurozone, as the latest eurozone PMI composite reading was the lowest in 40 months, coming in at 45.8 for October, a drop from 46.1 in September—a decline in economic growth that doesn’t bode well for the U.S. economy. (Source: Markit, last accessed, October 24, 2012.)
“There are two things to remember about the PMI readings: a number above 50.0 represents economic growth, and a number below 50.0 represents a decline in economic growth; and secondly, the trend is important,” explains Cekerevac. “While the number below 50.0 represents declining economic growth, if the trend was improving, it would be a positive sign for the future.”
However, Cekerevac states that the worry within the eurozone is that these numbers are generally weakening, especially in manufacturing, which will weigh down the chances of economic growth.
Cekerevac reports that the main worry for the world is that all eurozone members are now seeing a lack of economic growth.
“While in the past, only the periphery eurozone members were in trouble, many U.S. companies weren’t affected because these nations, such as Greece, were quite small,” Cekerevac points out. “Now we’re seeing drops in the PMI index in strong nations, like Germany.”
According to the Investment Contrarians editor, it appears that the eurozone crisis will continue for some time, as economic growth is needed to lift that union out of its difficult situation; with political maneuvering still occurring, there seems to be no plan for economic growth, concludes Cekerevac.
To see the full article, and to get a real contrarian perspective on investing and the economy, visit Investment Contrarians at http://www.investmentcontrarians.com.
Investment Contrarians is a daily financial e-letter dedicated to helping investors make money by going against the “herd mentality.”
The editors of Investment Contrarians believe the stock market and the economy have been propped up since 2009 by artificially low interest rates, never-ending government borrowing, and an unprecedented expansion of our money supply. The “official” unemployment numbers do not reflect people who have given up looking for work, and are thus skewed. They believe the “official” inflation numbers are also not reflective of today’s reality of rising prices.
After a 25- to 30-year down cycle in interest rates, the Investment Contrarians editors expect rapid inflation caused by huge government debt and money printing will eventually start us on a new cycle of rising interest rates.
Investment Contrarians provides unbiased research. They are independent analysts who love to research and comment on the economy and investing. The e-newsletter’s parent company, Lombardi Publishing Corporation, has been in business since 1986. Combined, their economists and analysts have over 100 years of investment experience.
Find out where Investment Contrarians editors see the risks and opportunities for investors in 2012 at http://www.investmentcontrarians.com.
George Leong, B. Comm., one of the lead editorial contributors at Investment Contrarians, has just released, “A Problem 23 Times Bigger Than Greece,” a breakthrough video where George details the risk of an economy set to implode that is 23 times bigger than Greece’s economy! To see the video, visit http://www.investmentcontrarians.com/press.