US-EU Manufacturing PMI Spread Hits Widest Since 2022; Inventory Glut Threatens Q4 Earnings

2026-10-31, FP360 — The US manufacturing PMI fell to 47.8 in October, while the eurozone PMI slipped to 43.2, pushing the spread to 4.6 points—the widest since 2022. The gap is driven by divergent inventory cycles, with the eurozone's new-orders-to-inventory ratio collapsing to 0.78, signaling a deepening demand slump.

The Signal: The US is outperforming Europe on manufacturing resilience, but rising inventories and falling new orders point to a Q4 growth slowdown, favoring defensive sectors and quality credit.

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Originally published on FINPULSE 360