| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Composite Index | 54.4 | 54.4 to 54.4 | 54.5 | 51.3 |
| Services Index | 54.8 | 54.8 to 54.8 | 54.8 | 51.3 |
Highlights
S&P's services PMI ended May at 54.8 to indicate better growth, up nicely from 51.3 in April. The outcome was unchanged from the flash report and in line with consensus expectations. The uptick reflected a return to expansion in new orders, somewhat offset by a reduction in staffing as firms appear reluctant to replace departing workers. The upbeat reading suggests a similarly decent bump in the ISM services index ahead.
The composite index ticked up to 54.5 in the final May report from 54.4 in the flash and up pretty sharply from 51.3 in April. The previously released manufacturing PMI came in at 51.3 in May, up from 50.9 in the flash May report and a neutral 50.0 in April.
The composite index ticked up to 54.5 in the final May report from 54.4 in the flash and up pretty sharply from 51.3 in April. The previously released manufacturing PMI came in at 51.3 in May, up from 50.9 in the flash May report and a neutral 50.0 in April.
Market Consensus Before Announcement
No change at the mid-month's 54.8 is the consensus for the services PMI's May final. This index ended April at 51.3.
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.
