US Services Activity Rises Most in 8 Months

The S&P Global US Services PMI rose to 53.6 in July of 2026 from 51.2 in the previous month, marking the fastest expansion in services sector activity so far this year, according to a flash estimate. Output was supported by a larger intake of new work for companies, with companies noting a pickup in activity due to FIFA World Cup spending and higher investments in sales, marketing, and product development. Still, the impact of the war in Iran, mainly though higher energy prices that lifted operating cars and squeezed consumers' purchasing power, continued to impact activity levels. Therefore, employment growth was only marginal. Input prices for the sector grew to a 14-month high, and output inflation surged to its highest in nearly four years. Despite inflationary risks, the sentiment gauge rose to a one-year high.

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.