Economic Buzz: US services PMI improves slightly in June as demand picks up

The latest S&P Global survey showed that business activity in the US services sector improved slightly in June, supported by stronger new business and gradually stabilizing economic conditions. The headline S&P Global US Services PMI Business Activity Index rose to 51.2 in June from 50.7 in May, marking the third consecutive month of expansion, although growth remained modest and below post-pandemic averages.

New orders increased at the fastest pace since February, helped by new project wins and higher demand linked to the FIFA World Cup. However, export business declined for the seventh straight month due to uncertainty over government policies and tariffs. Employment fell for the third time in four months as companies continued to avoid replacing staff who left voluntarily.

Input costs remained high because of higher labour expenses, tariffs and fuel prices, although cost inflation eased to its slowest pace since February. Selling price inflation was little changed from May and stayed historically elevated. Business confidence improved to its highest level since February, supported by expectations of better economic conditions, easing price pressures and new projects.

The S&P Global US Composite PMI also strengthened to 51.9 in June from 51.5 in May, reflecting strong manufacturing output and a modest rise in services activity, despite continued declines in employment.

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