The US services sector is still in disarray. But it's recovered a bit from its deep April slump.
That's according to the Institute for Supply Management, which surveys purchasing managers to track changes in business activities from the previous month.
In May, the purchasing managers' index (PMI) stood at 45.4 last month, up from 41.8 in April -- an improvement, and one that was slightly better than economists had expected.
The services sector is extremely important to the US economy. It includes everything from hospitality and entertainment, to travel, finance, real estate and agriculture. The effects of coronavirus hit services the hardest at first, which has made the downturn particularly painful.
Still, the sector seems to have recovered from its trough, even though any PMI level below 50 indicates economic contraction. It was the second contraction in a row following a 122-month period of expansion.
The small rebound "suggests that the services sector is now faring slightly better than the manufacturing sector as lockdowns are lifted. But the overall message is that the wider economic recovery is likely to be slow-going," said Michael Pearce, senior US economist at Capital Economics.
That was reflected in responses in May from purchasing managers, who told ISM they remained concerned about the pandemic's effect on their businesses, although many are planning on the resumption of business, said Anthony Nieves, chair of the ISM's Non-Manufacturing Business Survey Committee.
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June 04, 2020 at 12:35AM
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