U.S. private sector firms signalled a robust and accelerated rise in business activity during May, which adds to evidence of a sustained growth rebound in the second quarter of 2018. At 55.7 in May, up from 54.9 in April, the seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index was the highest for three months and well above the crucial 50.0 no-change value. A faster rise in service sector output was the key factor behind the acceleration in overall business activity.

Manufacturing production increased markedly, but at a slightly softer pace than in April. Another strong upturn in new business volumes helped to boost output growth in May. Survey respondents commented on resilient domestic demand and a supportive economic backdrop. Higher workloads contributed to the sharpest rise in unfinished business since March 2015.