Preliminary
data published by S&P Global on Thursday showed that U.S. private sector
business activity grew solidly in early May, reflecting stronger expansion
in activity in both services sector and manufacturing.
According to
the report, S&P Global flash U.S. Composite Purchasing Manager's Index
(PMI) Output Index came in at 54.4 early this month, up from 51.3 in April. The
latest reading pointed to the quickest rise in business
activity since April 2022 (56.0). Economists had predicted the composite PMI to
slip to 51.1.
A reading above
50 signals an expansion in activity, while a reading below this level signals a
contraction.
S&P Global
flash manufacturing PMI increased to 50.9 in May from 50.0 in the previous
month. Economists had predicted the manufacturing
PMI to remain unchanged at 50.0.
Meanwhile, S&P
Global flash services PMI checked in at 54.8 in May, up from 51.3 in April. The latest reading indicated the sharpest
increase in activity across the sector since May 2023 (54.9). Economists had forecast the services
PMI to hold steady at 51.3.
S&P Global
noted that the May upturn in the U.S. business activity was led by the service sector,
which registered the fastest growth for a year, reversing the slowdown seen over
the prior three months. In addition, manufacturing also expanded at an
increased pace in May. The rate of job losses eased amid improved business confidence
for the year ahead and increased order book intakes. Meanwhile, both input costs
and output prices increased at higher rates, with manufacturing having taken
over as the main source of price advances over the past two months.