February Marks a Notable Improvement in US Services Activity

The United States service sector experienced a slight acceleration in activity during February, as indicated by the Services Purchasing Managers' Index (PMI) rising to 53.5% from January's 52.8%, exceeding market forecasts, according to the Institute for Supply Management (ISM).

Key Indexes Show Promising Trends

Significant movements were observed in several key indexes: the New Orders Index increased by 0.9 percentage points to 52.2%, the Employment Index saw a substantial rise of 1.6 percentage points to 53.9%, and the Inventory Sentiment Index jumped by 1.2 percentage points to 54.7%. Conversely, the Business Activity Index experienced a minor decline of 0.1 percentage points to 54.4.

Insights from ISM Services Business Survey Committee Chair

Steve Miller, Chair of the ISM Services Business Survey Committee, highlighted that February marked the third consecutive month with all four subindexes in expansion territory, a scenario not seen since May 2022. Despite this positive trend, concerns linger regarding the potential impacts of tariffs and federal spending cuts on business forecasts.