- US Manufacturing PMI rose to a new series high in May.
- US Dollar Index rose above 90.00 after the data.
The business activity in the US manufacturing sector continued to expand at a robust pace in May with the IHS Markit’s Manufacturing PMI rising to a new series high of 61.5 from 60.5 in April. This reading came in better than the market expectation of 60.2. Further details of the publication revealed that the Employment Index edged lower to 53.3, the lowest level since December, from 55.7 in April. On a negative note, “input costs rose in May at a pace not seen since July 2008,” the IHS Markit noted. Moreover, the ISM Services PMI also notched a new series high at 70.1, improving from 64.7 in April. Finally, the Composite PMI jumped to 68.1 from 63.5. Commenting on the data, “the US economy saw a spectacular acceleration of growth in May, the rate of expansion of business activity soaring well above anything previously recorded in recent history as the economy continued to reopen from COVID19 restrictions,” noted Chris Williamson, Chief Business Economist at the IHS Markit. “The May survey also brings further concerns in relation to inflation, however, as the growth surge continued to result in ever-higher prices,” Williams added. “Average selling prices for goods and services are both rising at unprecedented rates, which will feed through to higher consumer inflation in coming months.” Nick Note: This report stopped me dead in the water. What a incredible upsurge in business activity. More then even i expected. It show me the economic boom coming is more far more then any of us are anticipating. The inflation component is picking up reflation. Come off a deflation and any increases in activity causes a inflation bubble in the numbers. By the end of the year the reflation will be over as pipelines fill back up. It is not a efficient process. As you are seeing many businesses did not see and still do not see the boom coming. Now they are scrambling for inventory. And in many cases they are doubling their orders and their will be continuing errors in inventory allocations…