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U.S. Non-Manufacturing PMI and Ezone Services PMI Compared

The 0.6-point difference in May between the ISM non-manufacturing purchasing managers index (56.9) and the euro zone services PMI compiled by IHS Markit (56.3) was 0.5 points smaller than in April. IHS Markit also measures a U.S. services PMI, and this rose by 0.5 points to 53.6. As was the case with the two economies’ manufacturing purchasing managers indices, there was little difference in their relative growth rates of activities between April and May. Both regions had indices comfortably above 50, implying a comfortable pace of positive economic growth.

The ISM survey revealed slower expansions of sales and orders, but jobs expanded more quickly. Service sector PMIs within Euroland in May ranged from 57.3 in Spain to 55.1 in Italy. Euroland’s composite PMI for both April and May of 56.8, a 73-month high, appears consistent with quarterly GDP growth of about 0.7% or close to 3.0% on an annualized basis in the second quarter.