- Prior was 51.4
- Manufacturing 52.3 vs 50.1 expected — best one-month jump since June 2022
- Prior manufacturing was 50.7
- Composite 52.1 vs 51.2 prior
- rise in
inventories of purchases was the largest recorded in
the 18-year survey history.
This is a nice rebound into solidly positive territory, no doubt due to lower tariffs and a rebound in the stock market.
This is worrisome, though not that surprising.
“Average prices charged for goods and services jumped
higher in May, rising at a rate not witnessed since
August 2022. An especially steep rise was seen for manufacturers’
selling prices, which posted the largest monthly
increase since September 2022. Charges levied for
services rose to the greatest extent since April 2023
The latest rise in output prices was overwhelmingly
linked to tariffs, having directly driven up the cost of
imported inputs or caused suppliers to pass through
tariff-related cost increases. Manufacturing input costs
rose at the sharpest rate since August 2022 while
service sector costs rose at the fastest rate since June
2023”
Here is Chris Williamson,
Chief Business Economist at S&P Global Market
Intelligence
“Business confidence has improved in May from the
worrying slump seen in April, with gloom about prospects
for the year ahead lifting somewhat thanks largely to the
pause on higher rate tariffs. Current output growth has
also picked up from April’s recent low, which had seen
the weakest rise for over one-and-a-half years, in
response to an upturn in demand.
“However, both sentiment and output growth remain
relatively subdued, and at least some of the upturn in
May can be linked to companies and their customers seeking to front-run further possible tariff-related
issues, most notably the potential for future tariff hikes
after the 90-day pause lapses in July. In particular,
concerns over tariff-related supply shortages and price
rises led to the largest accumulation of input inventories
recorded since survey data were first available 18 years
ago.
“Supply chain delays are now more prevalent than at any
time since the pandemic led to widespread shortages in
2022, and prices charged for both goods and services
have spiked higher as firms and their suppliers seek to
pass on tariff levies to customers. The overall rise in
prices charged for goods and services in May was the
steepest since August 2022, which is indicative of
consumer price inflation moving sharply higher.”
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