US Business Activity Growth Slower than Initially Thought

The S&P Global US Composite PMI increased to 51.9 in June from 51.5 in May, though the reading came in below the preliminary estimate of 52.2. Manufacturing output continued to expand strongly, while services activity also accelerated, albeit at a modest pace. New business growth strengthened toward the end of the second quarter, and business confidence over the next 12 months improved. However, employment declined for a second consecutive month. On the pricing front, input cost inflation eased slightly but remained elevated, while output price inflation was largely unchanged from May. Both input and output price pressures continued to run well above their historical averages.

The S&P Global US Composite PMI rose to 52.2 in June of 2026 from 51.5 in the previous month, reflecting the sharpest pace of growth in the US private economic activity since January, according to a preliminary estimate. The expansion was supported by the largest growth in the manufacturing output in six years (57.7 vs 56.6 in May) and a sharper increase in services activity (51.3 vs 50.7). Total new orders grew, with those for services likely supported by the start of the Fifa World Cup, and manufacturing orders remaining attributable to clients front-running contracts before the war in the Middle East causes further supply disruptions. This was aligned with larger magnitude of supply chain delays in the period, driving prices to continue increasing at last month's pace. In turn, employment fell for a second month as companies attempted to cut costs. Looking ahead, firms' confidence was recorded at the highest since February.

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.