US economy improves in May amid rising prices

US business activity accelerated to the highest level in just over two years in May, but manufacturers reported a surge in prices for a range of inputs, according to S&P Global's PMI survey data.

The monthly survey, released Thursday, showed that the composite Purchasing Managers' Index (PMI) for production rose to 52.1 points in May from 50.6 points in April, the lowest reading in 19 months.

However, S&P Global noted that this month's reading is one of the lowest recorded since early 2024.

The improvement in business performance was due to the services PMI rising to 52.3 points from 50.8 points during the same period, along with an increase in its counterpart for the industrial sector to 52.3 points from 50.2 points.

The survey results showed that business expectations regarding the future of activity improved after hitting lows in April. However, it remained weak compared to historical levels due to concerns about the impact of tariffs on demand, supply chains, and prices.

S&P reported that export orders continued to decline in May, amid a sharp decline in services exports, and that delays along supply chains worsened, pushing prices of goods and services to levels not seen since August 2022.