“Private sector firms across the U.S. signaled an unprecedented expansion in business activity in May. Growth was driven by the fastest service sector upturn on record, with the increase in manufacturing output also accelerating amid stronger client demand,” according to comments accompanying the midmorning release of the data.
Interestingly, the backlog in orders in both services and manufacturing this month were eased by additional hiring, with employment rising solidly in the most recent weeks, according to the survey’s responders.
The survey release coincides with a third consecutive weekly decline in new unemployment claims, with the latest data from the Labor Department showing fewer Americans are now seeking unemployment aid than at any point during the pandemic as some states end a supplemental $300 a week in federal payouts.
Twenty-two states, from Texas and Georgia to Ohio and Iowa, plan to begin blocking the supplemental federal payment for the unemployed starting in June, according to an Associated Press analysis. All have Republican governors and legislatures.
Recipients have been able to receive those benefits on top of their regular state unemployment aid. The payment, which lasts nationwide until Sept. 6, was included in President Joe Biden’s $1.9 trillion financial rescue package.
Brighter outlook for the labor market could support the view that the world’s largest economy is kicking into a higher gear this quarter, which bodes well for gasoline and diesel consumption. U.S. traffic volumes have almost returned to pre-pandemic levels, boosting gasoline consumption from pandemic lows.
In reaction to the bullish U.S. PMI data, the U.S. Dollar Index reversed sharply higher to end the volatile session at 90.005 after trading at 89.630, a 4 1/2-month low.
NYMEX July WTI rallied $1.64 to settle at $63.58 barrel (bbl) and the international crude benchmark Brent contract for July delivery settled above $66 at $66.44 bbl, gaining more than $1.50 on the session. NYMEX June RBOB futures advanced 2.13 cents to $2.0685 gallon, reversing off a better than three-week spot low settlement at $2.0472 gallon, while June ULSD futures gained 2.38 cents or 1.2% to settle at $1.9882 gallon.
Liubov Georges can be reached at firstname.lastname@example.org