Overview
- The ISM Manufacturing PMI rose to 54.0 in May, the fifth straight month of expansion and the strongest reading since May 2022, driven by higher new orders and production.
- The ISM services (non-manufacturing) PMI climbed to 54.5 in May, with new orders and inventories jumping sharply as businesses rebuilt stocks.
- Input-cost gauges surged in May, with the manufacturing Prices Index at 82.1 and the services prices measure at 71.3, as firms reported higher oil, metals and tariff-related costs.
- Supplier-delivery times stayed strained in May, with manufacturing at 60.6 and services at 55.2, a bottleneck that firms said reflected Iran-related disruptions and Strait of Hormuz shipping problems.
- Economists note the May readings map to roughly 2.2% annualized real GDP growth but warn that precautionary inventory building could unwind later and that rising input prices complicate Federal Reserve policy.