Courtesy of Mish.
If the US economy is ready for rate hikes starting June, you certainly would not ascertain that fact from the service sector PMI.
Today the flash reading shows service growth is the weakest since 2009, barely above contraction.
The Markit Flash U.S. Services PMI™ shows “Weak service sector growth persists in May, while business optimism eases to its lowest for over six-and-a-half years”.
Key Points
- Weakest rise in service sector activity for three months
- Service providers report slowest rate of staff hiring since December 2014
- Business optimism drops to its lowest recorded since the survey began in October 2009
Markit PMI Service Sector Activity
U.S. service providers indicated a sustained upturn in overall business activity during May, but the rate of expansion was only marginal and the weakest for three months. Survey respondents cited relatively subdued client demand and less favourable domestic economic conditions as key factors weighing on business activity in May.
The seasonally adjusted Markit Flash U.S. Services PMI™ Business Activity Index registered 51.2 in May, to remain above the crucial 50.0 no-change value for the third consecutive month. However, the index was down from 52.8 in April and much weaker than the long-run survey average (55.6).
