US Services PMI Hits 54.5 in May as Input Prices Reach Highest Since August 2022
Updated
Updated · Reuters · Jun 3
US Services PMI Hits 54.5 in May as Input Prices Reach Highest Since August 2022
3 articles · Updated · Reuters · Jun 3
Summary
New orders jumped to 57.3 and inventories surged to 62.5—the highest since May 2010—as businesses stocked up ahead of expected shortages and higher costs tied to the Middle East war.
Input prices rose to 71.3, the highest since August 2022, with petroleum-related costs, fuel surcharges and shortages in items such as electronic components pushing inflation deeper into services.
Supplier deliveries stayed slow at 55.2, signaling strained supply chains, while 17 industries expanded and only real estate, rental and leasing contracted.
Employment in services remained subdued despite ADP showing 122,000 private jobs added in May; economists still expect Friday's payrolls report to show a modest 85,000 gain and 4.3% unemployment.
The stronger activity and hotter price readings reinforce expectations that the Federal Reserve will stay cautious as war-driven commodity shocks keep inflation pressure elevated.