America’s Remarkable Resilience: The Surprising Strength of the US Economy in May

Despite concerns of a slowdown, the US economy has shown remarkable resilience and defied expectations. The latest S&P Global’s Flash U.S. Composite PMI rose to 54.4 in May from 51.3 in April, exceeding economist predictions of little change and reaching its highest level in 25 months.

The services sector played a significant role in driving this growth, with its component of the PMI rising to 54.8 from 54.2 in April. Manufacturing activity also showed positive movement, climbing to 50.9 from 50 in the previous month. These readings indicate expansion in both sectors, highlighting a robust turnaround in economic activity after a period of slower growth.

While other indicators suggest a cooling economy, the latest PMI data point to another strong GDP gain in the second quarter. The jobs report and initial GDP reading showed signs of slowing growth, but the PMI figures have shifted market dynamics, leading to a downturn in stocks and a rise in the 10-year Treasury yield.

The surge in the services sector raises concerns about potential demand pressures that could complicate the Federal Reserve’s efforts to control inflation