S&P global manufacturing PMI for May 50.9 versus 50.0 estimate

• 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%.

This article was written by Greg Michalowski at www.forexlive.com.