<div id="readability-page-1"><div>Following Japan's ugly PMIs (Services lowest since March 2025) and Europe's disaster (weakest composite EU PMI since late 2023)...<img width="500" height="222" src="https://imageproxy.pbkrs.com/https://files.zhedge.com/cdn-cgi/image/width=1920,quality=75,format=auto/https://assets.zerohedge.com/s3fs-public/inline-images/0%20-%202026-05-21T064123.819.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://files.zhedge.com/cdn-cgi/image/width=1920,quality=75,format=auto/https://assets.zerohedge.com/s3fs-public/inline-images/0%20-%202026-05-21T064123.819.jpg"/>...with prices surging...<img width="500" height="222" src="https://imageproxy.pbkrs.com/https://files.zhedge.com/cdn-cgi/image/width=1920,quality=75,format=auto/https://assets.zerohedge.com/s3fs-public/inline-images/0%20-%202026-05-21T064227.718.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://files.zhedge.com/cdn-cgi/image/width=1920,quality=75,format=auto/https://assets.zerohedge.com/s3fs-public/inline-images/0%20-%202026-05-21T064227.718.jpg"/>All eyes are on the US 'soft' survey data for signs of divergence (or contagion).With US 'hard' data improving notably, the preliminary soft survey data for May was mixed with improved performance in manufacturing was countered by a sluggish service sector.<ul><li>Flash US Services PMI Business Activity Index: 50.9 (April: 51.0). 2-month low.</li><li>Flash US Manufacturing PMI: 55.3 (April: 54.5).48-month high.</li></ul><img width="500" height="310" src="https://imageproxy.pbkrs.com/https://files.zhedge.com/cdn-cgi/image/width=1920,quality=75,format=auto/https://assets.zerohedge.com/s3fs-public/inline-images/bfmF12E.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://files.zhedge.com/cdn-cgi/image/width=1920,quality=75,format=auto/https://assets.zerohedge.com/s3fs-public/inline-images/bfmF12E.jpg"/>Source: Bloomberg“The damaging economic impact from the war in the Middle East is becoming increasingly evident in the business surveys,&#34; according to Chris Williamson, Chief Business Economist at S&amp;P Global Market Intelligence:<blockquote>&#34;The ‘flash’ PMI data for May recorded only modest growth of business activity as demand was again squeezed by a further spike in prices and jobs were cut as firms worried over rising costs and the economic outlook. </blockquote>Coming on the heels of a subdued April reading, the May PMI indicates that the economy will struggle to manage annualized GDP growth of much more than 1% in the second quarter...<img width="500" height="332" src="https://imageproxy.pbkrs.com/https://files.zhedge.com/cdn-cgi/image/width=1920,quality=75,format=auto/https://assets.zerohedge.com/s3fs-public/inline-images/2026-05-21_06-48-52.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://files.zhedge.com/cdn-cgi/image/width=1920,quality=75,format=auto/https://assets.zerohedge.com/s3fs-public/inline-images/2026-05-21_06-48-52.jpg"/>However, Williamson notes that even this subdued pace of growth may not last.<blockquote>&#34;On average, over the past three months order book growth has slowed to its weakest for two years, and a boost from precautionary stock building due to concerns over further price hikes and supply delays will not last forever. </blockquote>Demand also looks set to cool further in response to rising prices. <blockquote>&#34;Firms’ costs have jumped higher at a pace not seen since the energy price shock of 2022 and are being passed on to customers in the form of sharply higher selling prices. The survey price gauges therefore indicate that inflation looks set to rise further just as the economy cools.”</blockquote><img width="500" height="321" src="https://imageproxy.pbkrs.com/https://files.zhedge.com/cdn-cgi/image/width=1920,quality=75,format=auto/https://assets.zerohedge.com/s3fs-public/inline-images/2026-05-21_06-52-38.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://files.zhedge.com/cdn-cgi/image/width=1920,quality=75,format=auto/https://assets.zerohedge.com/s3fs-public/inline-images/2026-05-21_06-52-38.jpg"/>Finally, while the composite numbers are not that encouraging, on a relative basis, US looks dominant...<img width="500" height="310" src="https://imageproxy.pbkrs.com/https://files.zhedge.com/cdn-cgi/image/width=1920,quality=75,format=auto/https://assets.zerohedge.com/s3fs-public/inline-images/bfm2F78_0.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://files.zhedge.com/cdn-cgi/image/width=1920,quality=75,format=auto/https://assets.zerohedge.com/s3fs-public/inline-images/bfm2F78_0.jpg"/>Maybe trump was right about the impact of the war on everyone else? (Just don't tell anyone who drives!)</div></div>

SPGI

US manufacturing PMI reached a 48-month high at 55.3, while services PMI fell to 50.9, indicating mixed economic signals. The Chief Business Economist at S&P Global noted that rising costs and inflation are squeezing demand, with GDP growth expected to struggle above 1% in Q2. Despite the challenges, the US economy appears relatively strong compared to Japan and Europe, which are facing significant downturns.

- Japan's PMIs show significant contraction, with services at their lowest since March 2025, while Europe faces its weakest composite EU PMI since late 2023.  
- The mixed preliminary soft survey data for the US in May highlights a growing concern, with a flash Services PMI of 50.9 and a Manufacturing PMI of 55.3 indicating sluggish growth amidst rising costs.  
- Chief Economist Chris Williamson warns that the economic impact from the Middle East conflict is becoming evident, with inflationary pressures expected to rise as demand cools.

US PMIs Lead The World As Manufacturing Tops 4-Year Highs, Services Sink