US Business Activity Growth Slows as Services Slump, Costs Rise

US business activity growth slowed sharply in February, with the S&P Global Flash PMI Composite Output Index hitting a 17-month low of 50.4, down from 52.7 in January. The services sector contracted for the first time in 25 months, while manufacturing output rose to an 11-month high, partly due to tariff-related stockpiling. Business optimism slumped to its lowest since December 2022, driven by uncertainty over federal policies, tariffs, and rising costs. Input prices surged, especially in manufacturing, while service sector inflation hit a five-year low. Employment also dipped, marking the first decline in three months. The S&P Global Flash US Manufacturing PMI rose to 51.6 in February, signaling a second successive monthly improvement in business conditions.