S&P's PMI samples are reporting a significant increase in activity this month. Services lead the way"surging" as the report describes to 54.4 for May's flash versus April's final 51.3. Manufacturing also improved, to 50.9 from 50.0. These results will be lifting forecasts for the coming ISM reports which in April were 49.4 for services and 49.2 for manufacturing.

Year-ahead optimism is rising for both samples though uncertainty over"higher-for-longer" interest rates is a concern. And not all the details are favorable as employment among the two sectors declined and new orders for manufacturers also declined, though only marginally. Price data rose at a faster rate both for inputs and selling prices which is consistent with the general rise in activity.

May's consensus for manufacturing is 50.1 versus April's 50.0, readings consistent with stagnation. For services, the consensus is a modestly positive 51.4 versus 51.3.

The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector output by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. The flash data are released around 10 days ahead of the final report and are typically based upon around 85 percent of the full survey sample. The report tracks changes in variables such as new orders, stock levels, employment and prices across both manufacturing and services. Production is also tracked, defined as"production" for manufacturing and"output" for services. Results are synthesized into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster output is growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The data are produced by S&P Global.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that 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.