Financial News: US Private Sector Growth Fastest In Over 2

US Private Sector Growth Fastest In Over 2 Years As Demand Rebounds - S&P Global

06/05/2024 - 13:19:00 (RTTNews)

(RTTNews) - U.S. private sector activity rose at the fastest pace in over two years in May led by strong gains in output and new orders across both the manufacturing and services sectors, the purchasing managers' survey findings from S&P Global showed Wednesday. The S&P Global final US Composite PMI, which combines manufacturing and services, rose to 54.5 from 51.3 in April. A reading above 50 suggest growth in the private sector.

The final reading was the strongest since April 2022 and also a tad higher than the flash score of 54.4.

A renewed increase in new orders led the S&P Global final US Services PMI to a one-year high of 54.8 in May from 51.3 in April. The reading was unchanged from its flash score and the sector has now expanded in each of the past 16 months.

"Coming on the back of a similar acceleration in the manufacturing sector, the data suggest a healthy pace of expansion in the US private sector approaching the midway point of the year," Andrew Harker, economics director at S&P Global Market Intelligence, said.

New orders in the services sector grew in May after the first fall in six months in April, thanks to marketing efforts that secured new business and improvements in economic conditions.

However, new export orders shrunk for the fourth month in a row and at the fastest pace since January last year, as price hikes hurt external demand.

"It was not all positive in May, however, with services employment down for the second month running as firms wait to see whether the renewed rise in new business will be sustained before committing to new hires," Harker said.

"Despite lower employment, wage pressures remained a key factor pushing up input costs, which increased sharply again in May and prompted a faster increase in selling prices, providing further evidence that inflation remains sticky."

Business confidence strengthened modestly amid signs of improvement in demand.

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