The May US ISM services index rose quite a bit more than expected to a nine month high of 53.8 from 49.4. It was led by strong business activity (61.2 versus 50.9 in April) and rising new orders (54.1 versus 52.2) which, in turn, appears to be driven by export order strength (61.8 versus 47.9 in April). The volatility in the activity component is surprising and it may be best to take an average of May and April, which would give 56.1 versus 57.4 in March and 57.2 in February. So that would be consistent with firm, but modestly slowing services activity. As the chart below shows, the ISM business surveys, which have ... (full story)