Economic Report: U.S. economy’s expansion slows in May due to acceleration and weaker demand, S&P finds

The numbers: U.S. businesses stretched during a slowest gait in several months, a span of surveys showed, reflecting a effects of high inflation, ongoing supply shortages and some softening in patron demand.

The SP peep U.S. services index dump to a three-month low of 53.5 in May from 55.6 in a before month.

The peep U.S. prolongation index, meanwhile, slid to a three-month low of 57.5 from 59.2.

Any array over 50 signifies expansion, and numbers above 55% are exceptional.

Key details: New orders rose during a slowest gait given Aug 2020, when a coronavirus was still inspiring vast swaths of a U.S. economy.

The high cost of materials and reserve has taken a fee on orders, prolongation and patron demand. The supposed submit cost index rose to a new array high.

Other problems embody high gasoline prices, rising U.S. seductiveness rates and some-more costly labor, companies said.

Big picture: Rampant acceleration and a Federal Reserve’s devise to neatly lift seductiveness rates in response are behaving as drags on a economy.

The economy is still expanding, though during a slowest gait given a finish of extended supervision restrictions put in place early in a pandemic.

Looking ahead: “The early consult information for May prove that a new mercantile expansion emanate has mislaid serve momentum,” pronounced Chris Williamson, arch business economist during SP Global. The news used to be famous as IHS Markit.

“Companies news that direct is entrance underneath vigour from concerns over a cost of living, aloft seductiveness rates and a broader mercantile slowdown,” he added.

Market reaction: The Dow Jones Industrial Average

and SP 500

fell in Tuesday trades.

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