(Washington) Activity in the services sector in the United States returned to growth in May, growing even more than expected, after contracting in April for the first time since April 2022, according to the monthly survey published Wednesday by the professional federation ISM.
The index measuring this activity stood at 53.8% in May, compared to 49.4% in April. It then fell back below the 50% mark, signaling a contraction in activity.
The observed progression is better than expected, since analysts anticipated 50.7%, according to the Market Watch consensus.
This “is the result of significantly higher commercial activity (than in April), faster growth in new orders, a slowdown in deliveries from suppliers,” detailed the head of the survey for ISM , Anthony Nieves, quoted in the press release.
He adds that activity is progressing “despite the continued contraction in employment”, where the situation remains complicated, “mainly due to difficulties in filling positions and controlling labor expenditure”.
The majority of respondents indicate that current inflation and interest rates are an obstacle to improving economic conditions.
Anthony Nieves
Inflation remains high in the United States. After a rebound at the start of 2024, however, it stabilized in April, at 2.7% over one year according to the PCE index – favored by the Fed – and 3.4% according to the CPI index.
To curb it, the American central bank (Fed), which is on the front line, has maintained very high rates since last summer, in the range of 5.25 to 5.50%, their highest level in 20 years.
The next Fed meeting is June 11-12, and the central bank is expected to leave rates at this level. No decline is expected by market participants before the meetings in September or November.