US business activity jumps to a 4-month high in June, showing that the shock of the coronavirus pandemic is easing
- IHS Markit's flash US purchasing managers index jumped to 46.8 in June, from 37 in May, the company reported Tuesday.
- It's the highest the index has reached since the coronavirus crisis hit the US. Still, any reading of less than 50 signals a contraction.
- "The improvement will fuel hopes that the economy can return to growth in the third quarter," said Chris Williamson, chief business economist at IHS Markit, in the report.
A gauge of US business activity jumped to a four-month high in June, signaling that the shock of the coronavirus pandemic and related lockdowns is easing as the economy reopens.
The IHS Markit composite index of purchasing managers rose to 46.8 in June from 37 in May, the company reported Tuesday. It's the highest reading for the index since March, when the coronavirus pandemic shocked the US economy and nearly halted all activity.
The reading shows that business activity is recovering as the impact of the coronavirus pandemic eases, but still remains in contraction, denoted by any number below 50. The IHS Markit composite measures US orders from both services and manufacturing.
June also brought an uptick in optimism, with year-ahead output expectations reaching a four-month high, according to the report.
"The improvement will fuel hopes that the economy can return to growth in the third quarter," said Chris Williamson, chief business economist at IHS Markit, in the report.
"However, although brief, the downturn has been fiercer than anything seen previously, leaving a deep scar which will take a long time to heal," he said.
While firms noted that demand had rebounded in June, it still remains historically low as consumers weigh a potential second wave of coronavirus cases. In addition, June signaled further cuts to workforce numbers, and both hiring freezes and weak demand led some companies to lay off workers in an effort to cut costs.