US Services Activity Slows

The S&P Global US Services PMI eased to 50.9 in May of 2026 from 51 in the previous month, only slightly below the median market consensus of 51.1, according to a preliminary estimate. The result extended the rebound from the previous month following after the outbreak of war in the Middle East pressured the sector to a contraction in March. New business inflows rose modestly, as rising prices and uncertainty drove consumers to maintain their subdued demand. On top of that, export orders fell at the sharpest pace in six months. The muted demand for new projects drove firms to cut jobs at the fastest pace since May of 2020. On the price front, input costs for services providers rose the most in one year, driving charges to rise the most since August 2022. Looking ahead, business optimism dropped to a one-year low.

The S&P Global US Services PMI rose to 51 in April of 2026 from the three-year low of 49.8 in the previous month, revised slightly downward from the flash estimate of 51.3 but still ahead of the initial market expectations of 50. The result reflected a tentative recovery from the sharp and immediate impact of the war in the Middle East, which triggered supply risks for energy consumer that sent commodity pries soaring. Still, new business intake fell for the first time in two years, with panelists citing higher uncertainty from clients due to the war and fresh tariff concerns from the US government. Still, employment increased, particularly for part-time positions. Meanwhile, input price inflation remained elevated due to higher fuel and gas prices, in addition to increasing staffing costs, driving sellers to increase their charges. Looking ahead, business expectations remained high on hopes of an end to the Middle East war.

The S&P Global US Services PMI rose to 51.3 in April of 2026 from 50.3 in the previous month, well above market expectations of 50, according to a preliminary estimate. The result reflected a quick recovery in private services activity following the initial impact of the war in Iran, which triggered surges in energy prices and halted key trading activity. New business placed for companies inched higher, but remained below the average pace from the previous two years as clients cited affordability issues. Meanwhile, input costs rose the most since December, but the sharp increase was enough for firms to hike selling prices the most in 45 months. Meanwhile, employment levels inched higher. Business outlook improved slightly from the previous month, but remained sharply lower than comparable levels from last year.