US services and factory activity expanding at record pace in May, Markit says

Far from slowing, economic activity in the US expanded at a record pace in May, according to the results of two closely-followed surveys.

IHS Markit's composite output index, which tracks production levels in both manufacturing and services, jumped from April's level of 63.5 to 68.1 - a record high.

The lion's share of the acceleration in growth came from services, with the Business Activity Index for the sector surging from 64.7 to 70.1 (consensus: 64.2).

It was the highest reading for the index since Markit began collecting the data, in August 2009.

In manufacturing, the headline Purchasing Managers' Index rose from 60.5 to 61.5, which was also a record.

Price pressures jumped at a record pace with survey respondents citing the prices of oil, personal protection equipment and transportation as chief drivers, IHS Markit said.

At factories meanwhile, input costs were said to have risen at their quickest pace since July 2008, with raw material shortages expected to last through 2021.

Nonetheless, as Chris Williamson, chief business economist at IHS Markit said: "Growth would have been even stronger had it not been for businesses often being constrained by supply shortages and difficulties filling vacancies.

"With businesses optimistic about the outlook, backlogs of orders rising sharply and demand continuing to pick up both at home and in export markets, the scene is set for strong economic growth to persist through the summer."