Markit Services PMI Up Again in May
The May US Services Purchasing Managers' Index conducted by Markit came in at 53.6 percent, up 0.5 percent from the April estimate. The Investing.com consensus was for 54.1 percent. Markit's Services PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
Here is the opening from the latest press release:
Growth of business activity in the US service sector accelerated slightly in May, reaching a three-month high. This extended the current period of activity growth to 15 months.
The seasonally adjusted Business Activity Index continued to run above the crucial 50.0 no-change mark during May. A reading of 53.6, up from 53.1 in April, signalled the largest rise in overall activity since February. [Press Release]
Here is a snapshot of the series since mid-2012.
Here is an overlay with the equivalent PMI survey conducted by the Institute for Supply Management, which they refer to as "Non-Manufacturing" (see our full article on this series here). Over the past year, the ISM metric has been significantly the more volatile of the two.
The next chart uses a three-month moving average of the two rather volatile series to facilitate our understanding of the current trend. Since early in 2016, the ISM metric has shown stronger growth than the Markit counterpart. It will be interesting to see how these two indicators play out in 2017.
Both series weakened since 2015 and saw an uptick in the later half of 2016. The interim three-month moving average of the Markit Services index peaked in August of 2014. The ISM index peaked in September of 2015. The two were fairly closely aligned at the beginning of 2016, but they diverged early with the Markit index signaling noticeably weaker growth.