The April U.S. Services Purchasing Managers' Index (PMI) from S&P Global came in at 50.8, below the 51.4 forecast. The reading marks the 27th consecutive month of expansion and the slowest growth since November 2023.
From the latest press release, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:
"While tariff announcements mean manufacturing dominates the news, a worrying backstory is developing in the vastly larger services economy, where business activity and hiring have come closer to stalling in April amid plunging business confidence.
"Business and consumer facing service providers alike, and especially financial services firms, are reporting markedly weaker growth prospects, citing intensifying uncertainty over the economic outlook amid recent tariff announcements and ongoing federal spending cuts.
"A key area of weakness is slumping exports of services, which is now falling at rate not seen since 2022, but domestic demand is also reportedly waning as confidence slides lower.
"Higher prices paid for imports due to tariffs are also driving up service sector firms’ costs, feeding though to higher prices, notably in consumer-facing industries such as restaurants and hotels.
"The resulting bottom line from the services sector is a heightened risk of stalling growth and rising inflation, or stagflation."
Background on the S&P Global US Services PMI
The S&P Global US Services PMI™ measures the activity level of purchasing mangers in the services sector through a questionnaire of ~400 service sector companies. The sectors covered include consumer (excluding retail), transportation, information, communication, finance, insurance, real estate, and business services. The S&P Services PMI is a diffusion index, meaning that a reading above 50 indicates expansion in the sector compared to the previous month and a reading below 50 indicates contraction.
Here is a snapshot of the series since mid-2012.
