Services improve in May

The global economy looks like it remains on track to turn around.

In the US, the ISM's non-manufacturing index rose in May while factory orders rose in April. Bloomberg reports:

The Institute for Supply Management’s index of non- manufacturing businesses, which make up almost 90 percent of the economy, climbed less than forecast to 44 from 43.7 in April...

Another report today showed orders placed with factories in April rose for the second time in three months, as demand for automobiles, electrical equipment and construction machinery increased. Bookings gained 0.7 percent, after a revised 1.9 percent drop in March that was more than twice the previous estimate, the Commerce Department said.

However, employment remains weak.

... ADP Employer Services estimated companies cut 532,000 workers from payrolls.

The euro area also reported improvement in the services sector. From Bloomberg:

Europe’s manufacturing and service industries contracted more slowly in May, adding to evidence that the region’s worst recession since World War II is easing.

A composite index of both industries rose to 44.0 from 41.1 in April...

Markit’s services index increased to 44.8 from 43.8 in April...

There was even better news for the services sector in the UK. From Reuters:

The services purchasing managers' index rose to 51.7 in May from 48.7 in April, its highest level since March 2008 and the first time it has crossed the 50-mark that separates growth from contraction since April 2008, a survey by Markit and the Chartered Institute of Purchasing and Supply showed.

The unexpected increase in the service PMI also propelled the composite PMI, which includes Britain's harder-hit manufacturing and construction industries, into growth territory for the first time since March 2008, and pushed sterling to a 6-month high versus the euro.