U.S. business activity expanded at a significantly slower pace in June, according to the latest S&P Global Flash US PMI Composite Output Index. The index registered 51.2, down from 54.3 in May, indicating a marked deceleration in growth momentum.
The slowdown was evident across both the manufacturing and services sectors. The Flash US Services PMI Business Activity Index fell to 51.6 from 54.8, while the Flash US Manufacturing PMI Output Index edged down to 49.6 from 50.8, signaling a contraction in factory output.
The report highlighted that softer demand conditions contributed to the slower growth. New orders in the services sector saw a weaker increase, and manufacturing firms reported a renewed decline in new business.
On the price front, inflationary pressures showed some signs of easing. The rate of input price inflation softened across both sectors, although it remained elevated overall. This easing of cost burdens led to a slower pace of increase in selling prices.
Despite the slowdown in current activity, business sentiment remained optimistic. Expectations for future output improved in June, driven by hopes of stronger demand and an easing of economic headwinds.
Employment trends diverged across sectors. Services firms continued to increase their staffing levels, while manufacturers saw a slight decline in employment. Overall job creation remained modest.
In summary, the June flash PMI data indicates a notable cooling in the pace of U.S. business activity growth. While inflationary pressures showed some moderation and future expectations remained positive, the slowdown in demand and the contraction in manufacturing output will be closely watched in the coming months.
