US Manufacturing PMI rose from 51.2 to 51.6, an eight-month high. However, Services PMI dropped sharply from 52.9 to 49.7, marking a 25-month low. As a result, Composite PMI fell from 52.7 to 50.4, its lowest level in 17 months, signaling a broad slowdown in overall business activity.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, highlighted the dramatic shift in sentiment, stating that the “upbeat mood seen among US businesses at the start of the year has evaporated,” replaced by a “darkening picture of heightened uncertainty, stalling business activity, and rising prices.”
Optimism for the year ahead, which had been near a three-year high, has now dropped to “one of the gloomiest since the pandemic.”
Companies are increasingly concerned about the impact of federal government policies, citing spending cuts, tariffs, and geopolitical risks as key headwinds. Sales growth is reportedly slowing amid political uncertainty, while tariff-related cost increases are pushing prices higher.
Williamson added that while the PMI data last year suggested strong economic growth above 2%, February’s report signals a sharp slowdown, with annualized GDP growth now estimated at just 0.6%.
