U.S. business activity kept expanding in April, but beneath the surface, growth is losing steam, inflation is reawakening, and the once-reliable services sector is showing signs of malaise following Donald Trump‘s tariff announcements earlier this month.
In flash data released Wednesday by S&P Global, a slowdown in service sector activity dragged the U.S. Composite Purchasing Managers’ Index (PMI) to 51.2 in April, down from 53.5 in March. While still above the 50 mark that separates expansion from contraction, it’s the weakest reading since December 2023.
The flash Services PMI dropped to 51.4 from 54.4, marking the second-slowest pace of growth in the past year, and missing estimates of 52.5.
The Manufacturing PMI slightly improved to 50.7, up from 50.2, outpacing expectations of a drop to 49.1.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said the figures signal that U.S. output is expanding at a sluggish annualized pace of just 1.0%.
He added that the manufacturing sector is “broadly stagnating,” with the dampening effects of economic …