A further increase in US service sector business activity was recorded in June, although the rate of growth lost some momentum compared to May and remained well below levels recorded in the second half of 2024. New work volumes showed a similar trend, with international sales continuing to act as a drag on total business gains.
Tariffs meanwhile underpinned a further steep increase in operating expenses and selling prices, although inflation rates softened compared to May. Confidence in the outlook also remained below par, but firms were sufficiently optimistic to add jobs at the fastest rate for five months.
The S&P Global US Services PMI Business Activity Index registered 52.9 in June. That was down from 53.7 in May to represent a slightly slower, but still solid, increase in activity.
Growth has now been recorded for 29 successive months though remains noticeably slower when compared to the marked increases seen in the second half of 2024. Looking ahead to the next 12 months, the outlook for activity remains positive overall.
New business volumes continued to rise during June, with growth solid but also down since May. Jobs growth meanwhile was sustained in the latest survey period, with the latest upturn the best recorded since January.
Growth of the US private sector economy remained solid in June, and little changed since May.
The S&P Global US Composite PMI recorded 52.9, compared to May’s 53.0. Noticeably, manufacturing output returned to growth and was the best recorded since February. New orders similarly increased solidly, whilst employment growth improved to a five-month high.
Cost pressures remained strong, whilst there was another steep increase in selling prices. Confidence in the outlook remained positive but was again below its trend level.