US economic activity picks up to more than two-year highs, PMIs show

Economic activity in the US picked up unexpectedly in May, the results of two surveys revealed.

S&P Global's preliminary composite Purchasing Managers' Index jumped from a reading of 51.3 for April to 54.4 in May (consensus: 51.1) - a 25-month high.

Services activity accelerated the most with the corresponding PMI jumping from 51.3 to 54.8.

The factory PMI meanwhile strengthened from 51.1 to 52.4.

According to Chris Williamson, chief business economist at S&P Global, the data pointed to another "solid" expansion in gross domestic product over the second quarter.

He also called attention to the improvement in business confidence.

And yet, said Williamson " the final mile down to the Fed’s 2% target still seems elusive."

That was because cost and selling price inflation was now "somewhat elevated" in both sectors, with the largest inflation impulse having now switched to manufacturing.