IHS Markit: collapse in U.S. economy peaked in April
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IHS Markit: collapse in U.S. economy peaked in April
IHS Markit says latest U.S. PMI data indicate rate of collapse in U.S. economy peaked in April. U.S. private sector firms reported a slightly slower rate of contraction in activity in May, according to latest PMI data from IHS Markit. The firm said its flash manufacturing purchasing index rose to 39.8 in May from 36.1 in April. Meanwhile the flash services purchasing managers index rose in May to 36.9 from 26.7. Any reading below 50 indicates worsening conditions. The flash estimate is typically based on approximately 85%-90% of total survey responses each month.
“Encouragement comes from the survey indicating that the rate of economic collapse seems to have peaked in April. In the absence of a second wave of COVID-19 infections, the decline should moderate further in coming month,” said Chris Williamson, chief business economist at IHS Markit.
“The unprecedented speed and scale of the coronavirus crisis will probably expose the limitations of surveys like the PMIs. While the composite PMI is now consistent with GDP contracting by around 7% annualised in the second quarter, not much worse than the 4.8% fall in the first quarter, the hard activity data for April suggest the eventual decline could be more like 40% annualized,” Andrew Hunter, senior U.S. economist at Capital Economics.
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