The economy is on fire, ISM shows, but labor and supply shortages are a big drag

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The economy is on fire, ISM shows, but labor and supply shortages are a big drag
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ISM services index hits highest level on record in May

The numbers: The large service side of the U.S. economy expanded rapidly in May as Americans rushed to do all the things they couldn’t do during the pandemic, but widespread labor and supply shortages kept companies from growing even faster.

Although it’s the highest level on record, service-oriented companies still aren’t totally back to normal. The survey asks executives if business conditions are better or worse, but it doesn’t tell us how much so. “The rate of expansion is very strong, as businesses have reopened and production capacity has increased” said Anthony Nieves, chairman of the survey.

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