{"id":218955,"date":"2025-02-21T09:45:00","date_gmt":"2025-02-21T14:45:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?p=218955"},"modified":"2025-03-13T16:28:20","modified_gmt":"2025-03-13T20:28:20","slug":"us-services-drop-sharply-darkening-picture-of-high-prices-uncertainty-economist-says","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/us-services-drop-sharply-darkening-picture-of-high-prices-uncertainty-economist-says\/","title":{"rendered":"US Services Drop Sharply: &#8216;Darkening Picture&#8217; Of High Prices, Uncertainty, Economist Says"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-zinger-key-points\">Zinger Key Points<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The S&amp;P Global Flash U.S. Services PMI Business Activity Index falls to 49.7 in February from 52.9 in January.<\/li>\n\n\n\n<li>The Composite PMI Index, which combines services and manufacturing data, drops sharply to 50.4 points.<\/li>\n<\/ul>\n\n\n\n<p>February&#8217;s flash S&amp;P Global PMIs released Friday morning revealed a sharp, unexpected drop in services and raised concerns about the health of the private sector<a href=\"https:\/\/www.benzinga.com\/25\/02\/43877634\/us-stocks-fluctuate-in-preopen-volatility-doesnt-equal-financial-loss-unless-you-sell-says-expert\" target=\"_blank\" rel=\"noreferrer noopener\">&nbsp;in the United States.&nbsp;<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Services PMI Falls Sharply<\/h2>\n\n\n\n<p><strong>Services PMI:<\/strong>&nbsp;The S&amp;P Global Flash U.S. Services PMI Business Activity Index fell to 49.7 in February 2025 from 52.9 in January, sharply below expectations of 53 points. February&#8217;s data marks the first contraction in the services sector activity in over two years, according to data from Trading Economics.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Firms reported worsening new order growth to nearly stagnant levels due to uncertainty surrounding the Trump administration&#8217;s spending cuts and potential pro-inflationary policies.&nbsp;<\/p>\n\n\n\n<p>U.S. Services PMI is expected to be 52 points by the end of the first quarter, according to Trading Economics global macro models and analysts expectations.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Manufacturing PMI Edges Higher<\/h2>\n\n\n\n<p><strong>Manufacturing PMI:&nbsp;<\/strong>The U.S. Manufacturing PMI increased to 51.6 points in February, up from 51.2 points in January and above expectations of 51.5.<\/p>\n\n\n\n<p>February data shows a continuing recovery in the manufacturing sector and marks the highest reading since June 2024. Factory output grew for a second month in a row and at the fastest pace in nearly a year.&nbsp;&nbsp;<\/p>\n\n\n\n<p>U.S. Manufacturing PMI is expected to be 51 points by the end of the current quarter, according to Trading Economics global macro models and analysts expectations.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Composite PMI Shows Slowest Growth Since 2023<\/h2>\n\n\n\n<p><strong>Composite PMI:<\/strong>&nbsp;The Composite PMI Index, which combines services and manufacturing data, dropped sharply to 50.4 points in February, down from 52.7 points in January. It marks the slowest pace of private-sector expansion since September 2023, driven by February&#8217;s drop in services output.&nbsp;<\/p>\n\n\n\n<p>New order growth dropped and employment slipped while cost inflation grew and selling prices marked their slowest increase since late 2024.&nbsp;<\/p>\n\n\n\n<p>&#8220;The upbeat mood seen among U.S. businesses at the start of the year has evaporated, replaced with a darkening picture of heightened uncertainty, stalling business activity and rising prices,&#8221; said&nbsp;<strong>Chris Williamson<\/strong>, chief business economist at S&amp;P Global Market Intelligence.&nbsp;&nbsp;<\/p>\n\n\n\n<p><strong>Markets React:<\/strong>\u00a0All three major U.S. indices are red Friday with the\u00a0SPDR S&amp;P 500 ETF Trust\u00a0down 0.49% and the\u00a0Invesco QQQ Trust, tracking the Nasdaq 100, down 0.37%.\u00a0<\/p>\n\n\n\n<p>The\u00a0Invesco DB USD Index Bullish Fund ETF<strong>\u00a0<\/strong>which tracks the U.S. dollar index, is up 0.38% at $29.09 at the time of publication Friday.\u00a0<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted February 21, 2025 &#8211; <a href=\"https:\/\/www.benzinga.com\/general\/market-summary\/25\/02\/43884153\/us-services-drop-sharply-darkening-picture-of-high-prices-uncertainty-economist-says\">US Services Drop Sharply: &#8216;Darkening Picture&#8217; Of High Prices, Uncertainty, Economist Says<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The S&amp;P Global Flash U.S. Services PMI Business Activity Index falls to 49.7 in February from 52.9 in January.<\/p>\n","protected":false},"author":1584,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18,6,8,9,26,3],"tags":[18748,18750,2556,18747,18749],"contributors-categories":[13584],"class_list":{"0":"post-218955","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-macro","7":"category-north-america","8":"category-region","9":"category-securities","10":"category-text-articles","11":"category-traders-insight","12":"tag-composite-pmi","13":"tag-inflation-uncertainty","14":"tag-manufacturing-pmi","15":"tag-sp-global","16":"tag-u-s-services-pmi","17":"contributors-categories-benzinga"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.5) - 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