U.S. PMI Report: Manufacturing Industry in Quagmire, Service Industry Index Hits One-Year High

News from the Financial Associated Press on May 24 (Editor Zhao Hao)Shortly after the U.S. stock market opened on Tuesday (May 23), the latest data report released by the financial analysis company S&P Global showed that the U.S. manufacturing and service industries showed signs of differentiation, but overall U.S. economic activity is growing at the fastest rate in nearly a year. speed expansion.

Specific data show that the initial value of the U.S. manufacturing PMI in May fell from 50.2 in April to 48.5, the lowest level in nearly three months; the manufacturing output index fell from 52.4 to 51.0.

Flash manufacturing PMI Meanwhile, the flash service business activity index (services PMI) rose to a 13-month high of 55.1 from 53.6, compared with expectations for a drop to 52.6.

The initial value of the service industry PMI made the initial value of the composite PMI output index (composite PMI) record 54.5 in May, up 1.1 points from 53.4 in April, stronger than market expectations of 53, and the highest level in nearly 13 months .

The PMI is compiled through monthly surveys of purchasing managers, and it is a “barometer” to measure the development of the industry and reflect future economic trends. The index usually takes 50 as the critical point. If it is higher than 50, it means that a certain field is in a state of expansion; if it is lower than 50, it means that a certain field is in a state of shrinking.

Williamson, chief business economist at S&P Global Market Intelligence, wrote in a report that the U.S. economic expansion gathered further momentum in May, but the divergence was increasingly evident. While the services sector is enjoying a post-pandemic demand surge, especially in travel and leisure, manufacturers are struggling with excess inventory and a lack of new orders as spending shifts from goods to services.

Williamson also noted that the inflation landscape in the U.S. is also changing.Manufacturing prices have soared amid the pandemic amid strong demand and deteriorating supply, whileNow it’s the service industry’s turn to raise prices.As service providers seek to meet demand,Job growth has accelerated,butTighter labor market will trigger further inflationary pressureswhich is worrying.

Currently, the market is closely watching the Fed’s next move. Yesterday, St. Louis Fed President James Bullard said he expects the Fed will need to raise rates two more times this year to tame inflation. Bullard noted that price pressures also did not cool as quickly as previously expected.

And Minneapolis Fed President Neil Kashkari said he was open to not raising interest rates in June, but warned against reading too much into the pause. He stressed that if inflation did not fall, he would favor another rate hike.