US business activity sees sharp increase in May: Report

By Ovunc Kutlu

ISTANBUL (AA) - Business activity in the US saw a sharp increase last month, global data provider S&P Global said Wednesday in a report.

"A return to growth of new orders spurred US service providers to increase their business activity at a much faster pace midway through the second quarter of 2024," it said. "The increase in business activity reflected a renewed expansion of new orders, which rose modestly in May following a first reduction in six months during April."

The US Services Purchasing Managers’ Index (PMI) rose in May to its highest in two months, adding 3.5 points to 54.8, up from 51.3 in April.

The index, which measures the activity level in the services sector, was in line with estimates.

A reading above 50 indicates expansion and below 50 shows contraction.

"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," said Andrew Harker, economics director at S&P Global Market Intelligence.

"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," he added.