S&P global services highest in a year
- Prior month manufacturing 50.0
- Prior month services PMI 51.3
- manufacturing PMI for May 50.9 versus 50.0 estimate
- services PMI for May 54.8 versus 51.3 estimate. Best since May 2023
- composite PMI for May 54.4 versus 51.1 estimate.
From the S&P Global:
US business activity growth accelerated sharply to its fastest for just over two years in May, according to provisional PMI survey data from S&P Global, signalling an improved economic performance midway through the second quarter. The service sector led the upturn, reporting the largest output rise for a year, but manufacturing also showed stronger growth. Although companies continued to report lower employment, the rate of job losses moderated amid improved business confidence for the year ahead and higher order book intakes. Both input costs and output prices meanwhile rose at faster rates, with manufacturing having taken over as the main source of price growth over the past two months. However, the overall rate of selling price inflation remained below the average seen over the past year.
Commenting on the data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said:
“The US economic upturn has accelerated again after two months of slower growth, with the early PMI data signalling the fastest expansion for just over two years in May. The data put the US economy back on course for another solid GDP gain in the second quarter. Not only has output risen in response to renewed order book growth, but business confidence has lifted higher to signal brighter prospects for the year ahead. However, companies remain cautious with respect to the economic outlook amid uncertainty over the future path of inflation and interest rates, and continue to cite worries over geopolitical instabilities and the presidential election. Selling price inflation has meanwhile ticked higher and continues to signal modestly above-target inflation. What’s interesting is that the main inflationary impetus is now coming from manufacturing rather than services, meaning rates of inflation for costs and selling prices are now somewhat elevated by pre-pandemic standards in both sectors to suggest that the final mile down to the Fed’s 2% target still seems elusive.”
US yields have moved higher with the 10 year yield now up 3.5 basis points at 4.466%. The 2-year yield is up 5.1 basis points at 4.93%.
In the Forex:
- The USDJPY is moving higher and trades above the 157.00 level.
- The EURUSD as falling back below it's a 200 hour moving average 1.08433 after breaking higher before the data.
The NASDAQ has come off the boil and is up 101 points or 0.60%. The S&P index is up 7.45 points or 0.14%. The Dow industrial average is still down on a day by -203 points or -0.51%.
