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The US non-manufacturing purchasing managers' index (PMI) exceeds expectations
The US non-manufacturing purchasing managers' index (PMI) exceeds expectations
Service activity in America returned to expansion during the month of May, recording a reading above 50 points, which is the dividing line between expansion and contraction, bringing the US ISM services purchasing managers index to 53.8 points, compared to 49.4 in April, exceeding expectations for an expansion to 51 points.
The US Purchasing Managers' Index data in the non-manufacturing sector issued by the Institute for Supply Management (ISM) came in contrast to market expectations, as this indicator is important in interest expectations for the coming period, as it gives an overview of the performance of the economy in general and the possibility of it entering a recession.
Purchasing managers' index data in the non-manufacturing sector indicate an increase in economic activity compared to expectations and also compared to the previous reading, which contradicts the soft landing scenario that the US Federal Reserve is trying to implement before lowering interest rates.
After the release of the data, gold prices reduced their gains somewhat, as this coincided with the dollar index strengthening its gains.
The non-manufacturing purchasing managers index issued by the Institute for Supply Management (ISM) for May recorded 53.8 points, while expectations were for it to score 51 points, and the previous reading was 49.4 points.
The ISM Non-Manufacturing Index determines the level of activity of purchasing managers in the services sector, and a reading above 50 indicates expansion.
Reading this indicator is done by purchasing managers determining the level of some elements in this sector, including employment, production, new orders, resource distribution, and inventories.
The upward trend has a positive impact on the country's currency, as currency traders closely monitor this indicator, as purchasing managers, due to the nature of their work, can access data about the performance of their companies, which makes this indicator a leading indicator of general economic performance.
