US Private Sector Growth Softens in May

The S&P Global US Composite PMI stood at 51.5 in May 2026, down slightly from 51.7 in April, signaling a modest expansion in private sector activity. Growth in new business remained subdued, while performance varied across sectors, with stronger manufacturing activity partly offset by softer conditions in services. Employment declined at the fastest pace in six years, pointing to a weakening labor market. Business confidence also deteriorated, falling to its lowest level in 13 months. Meanwhile, inflationary pressures remained elevated, with input costs rising at the strongest pace in a year. Firms also increased selling prices more sharply, indicating that higher costs continued to be passed on to customers.

The S&P Global US Composite PMI came in at 51.7 in May 2026, the same as in April, continuing to point to resilient private sector activity although the rate remained more moderate than early in the year, preliminary estimates showed. Improved performance in manufacturing (55.3, the highest in 48 months vs 54.5) was countered by a sluggish service sector (50.9 vs 51). However, factory growth was again in part supported by temporary stock building and both sectors reported that order book growth had been somewhat subdued by the ongoing war in the Middle East, most notably in terms of export sales. Surging input costs, which jumped at the steepest rate since late-2022 on the back of rising war-related supply constraints and steep energy cost increases, were not only cited as causing lower sales but also contributed to steepening job losses and a further rise in selling price inflation to its highest since August 2022.

The S&P Global US Composite PMI was revised down to 51.7 in April 2026 from a preliminary 52.0, yet still improved from March’s 50.3. Growth was driven by a rebound in services and stronger manufacturing, though new orders and employment saw only modest increases. Business confidence improved from March. Price pressures intensified, with input cost inflation hitting the highest level of 2026 so far, and selling prices rising at the fastest pace in nine months.