Service Sector Activity in the US

The United States' service sector experienced a minor decline in activity during February, as reported by the Institute for Supply Management (ISM). The Services Purchasing Managers' Index (PMI) slightly decreased from 53.5% in January to 50.8% in February, yet it remained within the expansion territory.

Key Index Movements

Notably, the New Orders Index saw a reduction of 1.8 percentage points, settling at 50.4%. Conversely, the Inventory Sentiment Index improved by 1.9 percentage points to 56.6%, and the Business Activity Index increased by 1.5 percentage points to 55.9%. A significant downturn was observed in the Employment Index, which plunged by 7.7 percentage points into contraction at 46.2%.

Impact of Tariffs

"This month, there's been a notable rise in respondents reporting cost escalations linked to tariff activities," stated Steve Miller, Chair of the ISM Services Business Survey Committee. Despite ongoing worries about potential tariffs and reduced government spending, there was a balanced outlook in short-term sentiments among businesses.