US Services Activity Revised Marginally Lower: S&P Global

The S&P Global US Services PMI rose to 51.2 in June of 2026 from 50.7 in the previous month, revised marginally lower from the flash estimate of 51.3. Still, the result pointed to the fastest pace of expansion in the US services sector since before the outbreak of war in the Middle East triggered a global energy shock. New business grew at an accelerated pace, aided by an influx of high-spending tourists and events amid the FIFA World Cup that the US hosted during the period. Still, historically muted perceptions of business conditions dimmed the pace of hiring and the net amount of jobs decreased for the third month in the last four. Consistently, labor-related costs increased operating expenses in the period, magnifying the impact of tariffs and higher fuel prices from the war in Iran. Looking forward, firms continued to be optimistic on business output in the coming year.

The S&P Global US Services PMI rose to 51.3 in June 2026 from 50.7 in May, just above the market consensus of 51, according to a preliminary estimate. The latest reading indicated a modest improvement in business activity, the strongest since February, partly linked to the soccer World Cup. Output and new orders rose only slightly, with firms citing high prices, elevated interest rates, and weak confidence among businesses and consumers. Meanwhile, employment fell for a second month running. Supplier delivery times lengthened markedly, often linked to shipping disruptions due to the war in the Middle East as well as tariffs. In terms of prices, services input cost inflation climbed to a six-month high, while selling price inflation reached an 11-month high. Expectations for output in the year ahead improved, but sentiment remained well below long-run average, amid uncertainty over the economic outlook, the Middle East war, and tariff policies.

The S&P Global US Services PMI eased to 50.7 in May of 2026 from 51 in the previous month, revised lower from the preliminary estimate of 50.9 and remaining below the preliminary estimate of 51.1. Despite the slowdown, the result extended the rebound from the previous month 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. New business was also limited by the fastest reduction in orders from foreign clients since 2022. 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 sharply. Looking ahead, business optimism dropped to an over three-year low.