ISM May services PMI points to firmer jobs growth in the US
Activity on the services side of the American economy held up a tad better than expected last month, according to the results of a key survey of the sector's health.
Worth noting, a gauge for hiring contained in the same report hit a seven-month high, suggesting that any softness in US non-farm payrolls in May "will prove temporary" if it remained at those levels, said Ian Shepherdson, Pantheon Macroeconomics's chief economist.
The Institute for Supply Management's Purchasing Managers' Index for the sector rose from a reading of 55.5 for April to 56.9 in May (consensus: 55.6).
The 50.0 point level marks the threshhold between growth and contraction in the sector, with successively higher readings reflecting a quicker pace of growth the further the PMI moves above it.
A gauge tracking levels of employment in the sector meanwhile jumped from 53.7 to 58.1, while another linked to new orders rose from 58.1 to 58.6.
Prices paid by firms on the other hand slipped, with the corresponding sub-index slipping from 55.7 to 55.4.
"The employment index leads the official payroll numbers by two or three months, and the sharp rebound in May, to 58.1 - a seven-month high - from 53.7 in April is a very welcome development, provided it is sustained," Shepherdson said.
"The path of the index in recent months suggests that any softness in payrolls in May will prove temporary."