- POSTED: 04 Jun 2014 23:28
- UPDATED: 04 Jun 2014 23:29
Activity in the US services sector, the driver of the world's largest economy, surged in May, a positive sign for growth in the second quarter, data released on Wednesday showed.
WASHINGTON: Activity in the US services sector, the driver of the world's largest economy, surged in May, a positive sign for growth in the second quarter, data released on Wednesday showed.
The Institute for Supply Management (ISM) said its non-manufacturing purchasing managers index (PMI) rose to 56.3 in May from 55.2 in April, indicating accelerating growth. A number above a 50 reading indicates expansion.
May's PMI number was the highest since last August, when the index stood at 57.9.
The surge from April came in well above analysts' consensus 55.5 estimate.
Growth picked up in business activity, new orders, employment and prices. Of the 18 industries surveyed, 17 reported growth and only mining reported contraction.
"The majority of respondents' comments indicate that there is steady incremental growth and project a positive outlook on business conditions," said Anthony Nieves, chair of the ISM's non-manufacturing survey committee.
It was the third consecutive month of accelerating growth in the vast services sector, adding to evidence the economy has pulled out of its first-quarter slump blamed in part on unusually severe winter weather.
"That's a decent pickup from the first quarter and adds to the view that second-quarter growth in the US, though likely held back by trade, continued to recover after the Q1 contraction," said Jennifer Lee, senior economist at BMO Capital Markets.