According to S&P, the US economy grew faster in May, led by strong demand for services

Published: May 23, 2023 at 9:56 am ET

The numbers: Most of the US economy accelerated in May, surveys from S&P Global showed, but manufacturers lagged behind.

The S&P Flash Index for the US services sector rose to a 13-month high of 55.1 in May from 53.6 the previous month.

Most Americans are employed in the service sector of the economy: high tech, healthcare, retail, finance,…

The payment: S&P Global surveys showed that most of the US economy gained momentum in May, but manufacturers lagged behind.

The S&P Flash Index for the US services sector rose to a 13-month high of 55.1 in May from 53.6 the previous month.

Most Americans are employed in the service sectors of the economy: high tech, healthcare, retail, finance, leisure and hospitality, and so on.

The S&P Global US Manufacturing Sector Index, meanwhile, fell to 51 from 52.4 but was still ahead of Wall Street forecasters.

Any number over 50 indicates an expansion. The numbers below signal a decline.

The S&P Global surveys are among the first indicators each month to assess the health of the economy.

Big picture: The economy’s large service sector has continued to grow, keeping the US in expansion mode.

The industrial aspects of the economy have lagged as consumers shift spending from goods to services such as travel and leisure.

Economists are wondering how long the US can stay out of recession with interest rates rising sharply as the Federal Reserve battles high inflation. Higher borrowing costs tend to have a negative impact on the economy.

A majority of business economists think a recession is likely within 12 months, a new survey shows.

Looking ahead: “US economic expansion continued to gain momentum in May, but there is a growing dichotomy evident,” said Chris Williamson, chief economist at S&P Global.

Inflation, in turn, has been higher in service industries due to strong demand and the need for more workers, an issue that could fuel “further inflationary pressures,” he said.

Market reaction: The Dow Jones Industrial Average

DJIA

and S&P 500

SPX

fell in Tuesday trading.