Current: US purchasing managers’ index

The purchasing managers’ index for the USA (Markit PMI for May) has been published:

  • Manufacturing 39.8 (forecast was 38.0; previous month was 36.1)
  • Services 36.9 (forecast was 30.0; previous month was 26.7)
  • Overall index 36.4 (previous month was 27.0)

Chris Williamson from Markit, which collects the data, comments on this:

“The severe drop in business activity in May comes on the heels of a record downturn in April. This does confirm signs that GDP is set to suffer an unprecedented decline in the second quarter. Encouragement comes from the survey indicating that the rate of economic collapse seems to have
peaked in April. In the absence of a second wave of COVID-19 infections, the decline should moderate further in coming months as measures taken to
contain the coronavirus might steadily be lifted.”

“However, the sheer scale of the current downturn and associated job losses, and the fact that some restrictions will need to stay in place until an effective treatment or vaccine are found, highlights how a full recovery is unlikely to be swift. “We anticipate that GDP will decline at an annualised rate of around 37% in the second quarter, and it will take the economy two years to regain the prepandemic peak.”

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