Business activity in the US picked up speed in May, according to the S&P Global Flash US PMI Composite Outlook Index. It rose to a level of 54.4 in May, its highest level in more than two years.

“The US economic upturn has accelerated again after two months of slower growth, with the early PMI data signaling the fastest expansion for just over two years in May,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a press release.

“The data put the US economy back on course for another solid GDP gain in the second quarter,” Williamson continued.

Leading the upturn was the services sector, although manufacturing also showed growth. Along with the Flash US PMI Composite Output Index:

• The S&P Flash US Services Business Activity Index rose to a reading of 54.8 in May, a 12-month high.
• The S&P Flash US Manufacturing Output Index rose to a reading of 52.4 in May, a two-month high.
• The S&P Flash US Manufacturing PMI rose to a reading of 50.9 in May, a two-month high.

“Not only has output risen in response to renewed order book growth, but business confidence has lifted higher to signal brighter prospects for the year ahead,” Williamson said. “However, companies remain cautious with respect to the economic outlook amid uncertainty over the future path of inflation and interest rates and continue to cite worries over geopolitical instabilities and the presidential election.”

Although companies continued to report lower employment, the rate of job losses moderated amid improved business confidence, according to the report.

Williamson also noted the Fed’s 2% target for inflation appears to remain elusive.

Final data will be published on June 3 for manufacturing and June 5 for services and composite indicator.

The US PMI (Purchasing Managers’ Index) is produced by S&P Global and is based on original survey data collected from a representative panel of around 800 companies based in the US manufacturing and service sectors.

Global Flash US Composite PMI is a weighted average of the Manufacturing Output Index and the Service Business Activity Index. The Services Business Activity and the Manufacturing Output Index are based on the survey question “Is the level of production/output at your company higher, the same or lower than one month ago?”

For more information, see the full report.