The US services industry saw its biggest upturn in payrolls since June 2014
The Markit US services PMI slipped to 56.4 in May from 57.4 in April.
While this is a slight deterioration, any reading above 50 signals growth.
"Service providers indicate the sharpest upturn in payroll numbers since June 2014," Markit noted in its report.
"The US economy looks to have grown at a healthy pace in May, providing further evidence that the rate of expansion has picked up from the weak start to the year," Markit's Chris Williamson said. "The resilience of domestic demand in particular helped encourage companies to take on extra staff at the fastest rate for almost a year."
Here's a bit more commentary from Williamson:
"An upturn in business optimism to a six-month high also bodes well for robust growth to be sustained in coming months.
"The survey data put the economy on course to rebound in the second quarter, with GDP rising at an annualised rate of around 3%, with non-farm payroll growth continuing to run around the 200,000 level.
"Such keen hiring and robust economic growth inevitably tips the scales in favour of the Fed hiking rates later this year rather than waiting until 2016.
"However, the rate of expansion remains below the buoyant rates seen throughout much of last year, as slower growth of service activity has been accompanied by a slowdown in the manufacturing sector, which has seen exporters hit by the stronger dollar. Policymakers will be eager to see if this slower growth trend develops further over the summer months before risking any tightening of policy."
Markit also noted that higher fuel prices have been translating to higher input costs.
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