| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Composite Index | 54.5 | 54.5 to 54.5 | 54.3 | 53.4 |
| Services Index | 55.1 | 55.1 to 55.3 | 54.9 | 53.6 |
Highlights
The services PMI ends May at 54.9, down 2 tenths from the mid-month flash but up 1.3 points from April. Details are very positive led by what the report describes as a"strong expansion" in new business, both domestic and foreign. Output rose at the fastest pace in more than a year and the sample stepped up hiring. And in a further and very key plus, the strength in activity didn't result in greater price pressures as both input costs and selling prices softened. Confidence understandably is at its best level in a year. Watch for the ISM services index at the top of the hour.
Market Consensus Before Announcement
No change at the mid-month's solid 55.1 is the call for the PMI service's May final.
Definition
US Services Purchasing Managers' Index (PMI) is based on monthly questionnaire surveys collected from over 400 U.S. companies which provide a leading indication of what is happening in the private sector services economy. It is seasonally adjusted and is calculated from seven components, including New Business, Employment and Business Expectations.
Description
Investors need to keep their fingers on the pulse of the economy because it indicates how various types of investments will perform. The Markit Services PMI provides advance insight into the services sector, which gives investors a better understanding of business conditions and valuable information about the economic backdrop of various markets. The stock market likes to see healthy economic growth which generally translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures. The PMI data are also used by many Central Banks to help make interest rate decisions.
The IHS Markit Services Flash data give a detailed look at the services sector, the pace of growth and the direction of this sector. Since the service sector accounts for more than three-quarters of U.S. GDP, this report has a significant influence on the markets. In addition, its sub-indexes provide a picture of new business, employment, business expectations and prices.
The IHS Markit Services Flash data give a detailed look at the services sector, the pace of growth and the direction of this sector. Since the service sector accounts for more than three-quarters of U.S. GDP, this report has a significant influence on the markets. In addition, its sub-indexes provide a picture of new business, employment, business expectations and prices.
