June 4, 2014 / 1:51 PM / 6 years ago

U.S. services sector grows at fastest rate in more than two years: Markit

Reni Mimura, a waitress at the Maid Cafe New York, speaks with customers in New York November 20, 2013. Originating in Japan, where maid cafes have been around for over a decade, this subset of cosplay restaurants were originally designed primarily to cater to the fantasies of male otaku, fans of anime, manga, and video games. REUTERS/Shannon Stapleton (UNITED STATES - Tags: SOCIETY) - RTX15MCT

NEW YORK, (Reuters) - The U.S. services sector expanded in May at its fastest rate since March 2012, an industry report showed on Wednesday, though the pace was revised down from a preliminary read on the month.

Financial data firm Markit said its final services Purchasing Managers Index was 58.1 in May, up from the April read of 55 but below the preliminary reading of 58.4.

A reading above 50 signals expansion in economic activity.

The services sector added employees at the fastest rate since January, with the employment subindex rising to 52.8 from 51.2, below the initial reading of 53.1. New business growth for the services sector was at its fastest since February 2011.

Markit’s composite PMI, a weighted average of its manufacturing and services indexes, hit 58.4 in May, up solidly from April’s read of 55.6. While the index was slightly under the preliminary May reading of 58.6, it was the highest since March 2012.

“The final PMI for May has come in slightly weaker than the earlier flash estimate but is yet another indication that business activity rebounded strongly in the second quarter,” said Chris Williamson, chief economist at Markit.

“If growth persists at anything like this pace over the summer, talk will inevitably increasingly move to (the economy’s) ability to cope with higher interest rates.”

Reporting by Ryan Vlastelica, Editing by Chizu Nomiyama

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