September’s S&P Global PMI survey of US private service sector companies signaled a further, but nonetheless weaker, expansion of business activity. Slower growth was linked to a softer expansion of new work, despite an improvement in foreign demand for the first time in six months.
Meanwhile, sentiment regarding the outlook strengthened, linked in some instances by firms to lower interest rates. However, hiring activity increased only marginally amid some reluctance to replace leavers.
On the price front, cost pressures remained elevated, driven principally by tariffs and higher salary payments. In response, service providers raised their own selling prices but at the slowest rate for five months.
The headline S&P Global US Services PMI Business Activity Index recorded 54.2 in September, down from 54.5 in August. Remaining above the critical 50.0 no-change mark, that separates growth from contraction, the index has now signaled continuous service sector expansion for 32 months.
Business confidence also improved in September, strengthening to its highest since May. Tariffs remained a key source of cost pressures in September, which overall rose sharply and to a slightly faster degree than the previous month.
The S&P Global US Composite PMI recorded 53.9 in September. That was down from 54.6 in August and represented the slowest growth for three months. Both sectors covered by the survey recorded weaker output expansions in line with slower gains in new business.
Employment meanwhile barely rose, but confidence in the outlook strengthened noticeably. Cost pressures remained elevated, although inflation softened to a five-month low. A similar trend was seen for output charges.