FX.co ★ US Private Sector Growth Improves in May

The S&P Global US Composite PMI increased to 52.1 in May from 50.6 in April, indicating a slight improvement in business activity, although growth continues to be modest compared to historical norms. This represents the fastest growth since March, yet it is still one of the slower readings since early 2024. Business optimism and expectations for future output have risen from April's low points but remain subdued due to ongoing tariff concerns. Companies have reported that demand is being suppressed, supply chains are being disrupted, and prices are rising as a result of tariffs. Export orders experienced a further decline, particularly in the services sector, while delays in supply chains have become more pronounced. The prices for goods and services have increased at the most accelerated rate since August 2022, driven primarily by costs associated with tariffs. Meanwhile, manufacturers have increased their input inventories at an unprecedented rate to mitigate potential future disruptions. Despite an uptick in activity, the overall outlook remains cautious due to ongoing challenges related to inflation and trade.