Economic Buzz: US business activity improves for third straight month in June, but growth remains below early-year levels

US business activity expanded for a third consecutive month in June, with the flash S&P Global US PMI Composite Output Index rising from 51.5 in May to 52.2, marking the strongest output growth since January. However, overall growth remained weaker than at the start of the year.

The survey highlighted a split economy, with modest service sector growth contrasting with strong manufacturing performance. While service activity recorded its fastest increase since February, growth in output and new orders remained subdued as businesses cited high prices, elevated interest rates and weak customer confidence. Manufacturing output, meanwhile, grew at its fastest pace since July 2021, supported by the strongest rise in new orders in more than four years.

Factories continued to build inventories, with input stocks increasing at the fastest rate in the survey?s history, excluding the tariff-driven surge in 2025. Supply chain disruptions intensified, with supplier delivery times lengthening to the greatest extent since August 2022.

Input cost inflation eased from May but remained the third-highest since early 2023. Selling price inflation was unchanged at the highest level since July 2025, with service sector prices rising at an 11-month high.

Employment declined for a second straight month and for the third time in four months. Manufacturing jobs fell at the fastest rate since May 2020, while service sector job losses were modest.

Business confidence improved to its strongest level since February, although sentiment remained below long-term averages due to concerns over the Middle East conflict, tariffs and the broader economic outlook. The S&P Global US Manufacturing PMI increased from 55.1 in May to 55.7 in June, its highest level since May 2022.

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