US Service ISM: A less-bad report in May – Wells Fargo

Data from the US released on Wednesday showed the ISM non-manufacturing index rose in May to 45.4, surpassing expectations. The details of this report suggest the economy was ‘less-bad’ in May than in April, though it is still likely a long-road to recovery, explained analysts at Wells Fargo. 

Key Quotes: 

“The headline index is still at a level consistent with contraction, but with many non-essential businesses starting to return in a limited capacity in May, more firms reported a pickup in activity relative to April. This rebound was most evident in the 15.0 point jump in the business activity component, from a record low 26.0 in April.”

“April was likely the bottom, provided no renewed virus outbreak.”

“Employment increased only modestly, and continues to suggest a grim outlook for services jobs. While activity restarts amid a pick-up in services demand, a complete rebound in the services sector may be slower to gain momentum.”