US economic growth picks-up in April, leading Markit to expect positive surprises

Factory and service sector activity in the States picked-up noticeably in May, according to the results of two widely-followed surveys, which some economists said pointed towards scope for positive surprises on the growth front in the the near-term.

IHS Markit's composite US purchasing managers' index, which combines survey findings for both those sectors, jumped from a reading of 54.2 for March to 54.8 in April .

Within that, the survey compiler's factory sector PMI jumped from 55.6 to 56.5 (consensus: 55.0), to reach a 43-month high.

The services sector PMI also strengthened, rising from 54.0 to 54.4 - a two-month high.

According to IHS Markit's Chris Williamson, there was room for "substantial upside surprises" on the US growth front in coming months.

In particular, he pointed out how output growth at factories was running at its strongest for 15 months, adding that the services sector was seeing a "steady and robust" expansion.

Growth in gauges for new orders and companies' expectations meanwhile were at their strongest in three years and hiring was also "robust", Williamson said.

"The surveys point to non-farm payroll growth of approximately 200,000 in April.

"[...] Prices are meanwhile being pulled upwards by the strength of the upturn, however, sending hawkish signals for policy makers."