Investing.com - U.S. private sector activity grew in April, according to survey data released on Monday.
The preliminary reading of the Markit services purchasing managers’ index came in at 54.4 this month from 54.0 in March.
Economists had forecast a reading of 54.3.
The manufacturing PMI rose to 56.5, compared to expectations for 55.2 and from 55.6 a month earlier.
The composite output index, which measures the combined output of both the manufacturing and service sectors rose to 54.8 from 54.2, against expectations for 55.3.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
The research group noted that the surveys registered the second strongest monthly expansion since last October.
“Manufacturing is leading the upturn, with factories reporting the strongest output gains for 15 months, and the vast service sector is enjoying a steady, robust expansion,” IHS Markit chief economist Chris Williamson explained.
“After a relatively disappointing start to the year, the second quarter should prove a lot more encouraging,” this expert indicated.
Williamson said that the survey data pointed to growth of 2.5% in the second quarter.
He highlighted that growth in new orders accelerated to show the largest surge in demand for goods and services for just over three years while companies’ expectations for growth also jumped to a three-year high.
Williamson also noted that hiring remained robust, pointing to the creation of around 200,000 nonfarm payrolls in April.
“The details of the survey therefore suggest that output growth is on course to accelerate as we move into the summer,” Williamson concluded.
However, he also warned that prices are meanwhile being pulled upwards by the strength of the upturn, “sending hawkish signals for policy makers”.