The Markit Flash U.S. Services Purchasing Managers’ Index (PMI) jumped 6.2% to 58.4 for May, according to a Markit report released today, showing its fastest rate of growth in 26 months. As key services indicators continue to expand, Markit is pointing to this latest estimate as reason to believe the economy is on the recovery road.
The “flash” estimate is typically based on approximately 85% to 90% of total PMI survey responses each month and is designed to provide an accurate advance indication of the final PMI data. An above-50 reading denotes general growth, while below 50 signals contraction.
This month’s report marks an especially strong push for the services sector. From an already strong 54.2 flash reading for April, analysts were pleasantly surprised by this latest news, having expected a smaller bump to 55.4.
Diving deeper into components, April’s flash index shows nearly across-the-board improvement. New business advanced 3.6 points to 58.7 and business expectations notched a stronger level of optimism, for example. As a sign of longer-term stability, employment continued to grow past standstill status, up another 1.9 points to 53.1.
“May’s flash services PMI survey is a further signal that the U.S. economy has regained momentum through the second quarter of the year,” said Markit Senior Economist Tim Moore in a statement today. “An improving service sector picture reinforces the upbeat message from the equivalent U.S. manufacturing survey in May. As a result, the pendulum appears to be swinging toward firmer economic growth into the summer months.”
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