The U.S. economy continued to accelerate in April as more Americans were vaccinated and many of the anti-pandemic measures that had shackled businesses were lifted, surveys of business executives show.
Data firm IHS Markit said its composite index, which includes both the services and manufacturing sides of the economy, jumped to 62.2 from an upwardly revised 59.7 in March. That easily beat the 59.5 expected and the 59.1 initially reported for the prior month.
The services index jumpd to 63.1 from 60.4 (upwardly revised from 60), the highest reading ever in data going back to 2009. That indicates the fastest expansion of the sector in at least 11 years.
Executives as services business reported surging growth in new business, boosted by rising demand and the easing of restrictions.
Surveys of the manufacturing sector have been coming in much stronger than expected—with extremely positive reports from regional Fed banks in New York, Philadelphia, and Kansas City—and the IHS Markit survey also came in strong. The index rose to 60.6 in April, up from 59.1 in March. Manufacturers noted that they have had trouble obtaining raw materials.
The IHS Markit report is the latest piece of evidence that the economy is much stronger than it was expected to be at this point, a stumbling block for the Biden administration’s big spending plans—which were partially based on the idea that the economy would need government aid to continue to grow.