US PMIs Lead The World As Manufacturing Tops 4-Year Highs, Services Sink
The short version
- All eyes are on the US 'soft' survey data for signs of divergence (or contagion).
- With US 'hard' data improving notably, the preliminary soft survey data for May was mixed with improved performance in manufacturing was countered by a sluggish service sector .
- Flash US Services PMI Business Activity Index: 50.9 (April: 51.0). 2-month low.
- Flash US Manufacturing PMI: 55.3 (April: 54.5). 48-month high.
- Coming on the heels of a subdued April reading, the May PMI indicates that the economy will struggle to manage annualized GDP growth of much more than 1% in the second quarter ...
The story
Following Japan's ugly PMIs (Services lowest since March 2025) and Europe's disaster (weakest composite EU PMI since late 2023)...
...with prices surging...
All eyes are on the US 'soft' survey data for signs of divergence (or contagion).
With US 'hard' data improving notably, the preliminary soft survey data for May was mixed with improved performance in manufacturing was countered by a sluggish service sector.
-
Flash US Services PMI Business Activity Index: 50.9 (April: 51.0). 2-month low.
-
Flash US Manufacturing PMI: 55.3 (April: 54.5). 48-month high.
Source: Bloomberg
“The damaging economic impact from the war in the Middle East is becoming increasingly evident in the business surveys," according to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence:
"The ‘flash’ PMI data for May recorded only modest growth of business activity as demand was again squeezed by a further spike in prices and jobs were cut as firms worried over rising costs and the economic outlook.
Coming on the heels of a subdued April reading, the May PMI indicates that the economy will struggle to manage annualized GDP growth of much more than 1% in the second quarter...
However, Williamson notes that even this subdued pace of growth may not last.
"On average, over the past three months order book growth has slowed to its weakest for two years, and a boost from precautionary stock building due to concerns over further price hikes and supply delays will not last forever.
Demand also looks set to cool further in response to rising prices.
"Firms’ costs have jumped higher at a pace not seen since the energy price shock of 2022 and are being passed on to customers in the form of sharply higher selling prices. The survey price gauges therefore indicate that inflation looks set to rise further just as the economy cools.”
Finally, while the composite numbers are not that encouraging, on a relative basis, US looks dominant...
Maybe trump was right about the impact of the war on everyone else? (Just don't tell anyone who drives!)
How this story developed
Full timelineAlto has tracked this across 33 days of coverage from 1 outlet.
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The Story At A Glance
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- • US manufacturing hit a 48 month high with a PMI of 55.3.
- • US services activity slowed to a 2 month low at 50.9.
- • Rising input costs and inflation are squeezing business demand and employment.
The US economy is showing a divergence where industrial production thrives while the service sector struggles. This occurs amidst global economic instability and rising prices driven by international conflicts.
Christian Perspective
Economic volatility and rising costs place a heavy burden on the working man and the traditional family unit. Stability in manufacturing is vital for maintaining the domestic strength required to support a Christian household. We must pray for wisdom for leaders to manage these economic shifts without crushing the citizenry through inflation.
Implications
A strong manufacturing sector supports the American worker and preserves the dignity of labor. However, rising prices threaten the ability of families to provide for their children and maintain a stable home. Economic sovereignty is essential to protecting the American way of life from globalist fluctuations.
Broader Trends
The divergence between manufacturing and services reflects a shift toward a more self-reliant national economy. This strength contrasts with the decay seen in Europe and Japan. It reinforces the necessity of America First policies to insulate our people from foreign economic disasters.
Takeaway
Prioritize domestic production to ensure national independence and economic security. Avoid the pitfalls of globalist reliance that leave our economy vulnerable to foreign wars. Focus on policies that protect the purchasing power of the American family.
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