FX.co ★ US Services Activity Slow More than Expected

The S&P Global US Services PMI dropped to 51.4 in April 2025, down from 54.4 in March, falling short of market predictions of 52.5. This represents the second slowest growth rate in services activity over the past year, second only to February’s reading of 51, according to preliminary data. The deceleration is primarily attributed to a notable slowdown in new orders, with businesses pointing to client uncertainty stemming from tariff issues and an unstable economic environment, particularly affecting foreign orders. The weakened demand prompted service providers to reduce their hiring efforts, compounded by increasingly scarce labor availability. On the pricing front, input cost inflation reached a seven-month high, prompting companies to raise their output prices. Looking forward, business sentiment regarding output in the year ahead fell to its lowest point since October 2022, driven by uncertain economic policies from the new Presidential administration.