- Michelle Girard, chief U.S. economist at RBS Securities
US manufacturing activity growth accelerated in May for the first time in six months, supported by more new orders as well as an increase in hiring. The Institute for Supply Management said its manufacturing PMI gauge booked 52.8 in May, following a reading of 51.5 in the preceding month. That was the highest reading since February. The employment index bounced back to expansionary territory after a month of contraction, climbing to 51.7 from 48.3 in April. The new orders index enjoyed its best month since December, surging to 55.8 from 53.5 in April, while the prices paid index saw its best month since October, soaring to 49.5 from 40.5 in April. In contrast, Markit said that Manufacturing activity across America unexpectedly decelerated in May, adding to signs that the strong Greenback has been holding down the US economy. The latest final PMI print from Markit came in at 54.0, compared to the 54.1 seen in April.
Meanwhile, US consumer spending was unexpectedly flat in April as households cut back on purchases of cars and continued to increase savings. The unchanged reading in consumer spending followed a 0.5% increase in March. The Commerce Department report also showed no inflation pressures, with a price index for consumer spending recording its smallest gain since late 2009 on an annual basis.
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