The large service side of the U.S. economy expanded rapidly in May as Americans rushed to do all the things they couldn’t do during the pandemic, but widespread labor and supply shortages kept companies from growing even faster.
A survey of businesses such as retailers, restaurants and hotels climbed to a record high of 64 percent last month from 62.7 percent in April, the Institute for Supply Management said Thursday.
Any number above 50 percent signals expansion and readings above 60 percent are exceptional.
“The rate of expansion is very strong, as businesses have reopened and production capacity has increased” said Anthony Nieves, chairman of the survey.
Economists surveyed by Dow Jones and The Wall Street Journal had forecast the index would total 62.5 percent.
Big picture: Americans are eager to go away for vacation, eat dinner out, visit a museum, take in a ball game or do many of the things that were largely off limits in the past year. And they have some extra cash courtesy of the federal government.
The result has been an explosion in sales — and a struggle by many companies to keep up. Labor is in short supply despite high unemployment for example, and prices for virtually everything are on the rise.
Click here to see the full report from Jeffry Bartash at MarketWatch.com.
