US Services Activity Growth Stalls: S&P Global

The S&P Global US Services PMI rose to 52.7 in January of 2026 from 52.5 in the previous month, revised upwards from the flash estimate of 52.5 and loosely aligned with the initial market expectations of 52.8. The period marked nearly three years of monthly growth in the US services output, outperforming those from other major economies. New sales rose at a sharper pace at the start of the year, as robust activity in the domestic market was enough to offset softness for foreign clients amid the tariffs passed by the US and their retaliatory measures. The steady capacity demand drove employment numbers to increase marginally. Meanwhile, increases in payrolls and cost pressures from tariffs lifted input inflation, although selling charges increased to a lesser extent. Looking forward, business confidence for the upcoming year fell to its lowest in three months.

The S&P Global US Services PMI was at 52.5 in January of 2026, remaining unchanged from the eight-month low in the previous month and slightly below market expectations of 52.8. Still, the period marked almost three years of consecutive monthly growth, outperforming other major economies. Inflows of new business moderated slightly from the previous month, with exports falling at the sharpest rate since 2022. The softer demand for capacity drove employment growth to ease, magnifying the impact of higher labor costs in the sector. Still, input cost inflation moderated despite remaining elevated, feeding into marginally lower output charge inflation. Looking forward, business confidence for the upcoming year fell to its lowest in three months.

The S&P Global US Services PMI fell to 52.5 in December of 2025 from 54.1 in the previous month, revised lower from the preliminary estimate of 52.9 and below the initial market estimate of 54 to reflect the softest increase in the sector in eight months. New business growth dropped to its lowest in 20 months, with panelists noting higher uncertainty in market demand and lower consumer spending, citing tariffs as a key source of instability. Likewise, trade frictions drove export orders to fall the most since May. The softer demand for capacity and ongoing budget constraints drove employment volumes to inch lower for the first time in nine months. Meanwhile, input price inflation rose to a seven-month high due to tariffs and broad increases in supplier charges, magnifying the increase in labor expenses. Consequently, output charges rose to a four-month high. Still, business confidence remained positive with support from an outlook of interest rate cuts and expanding business plans.