FX.co ★ US Service Sector Growth Strengthens in May

The S&P Global US Services PMI climbed to 53.7 in May 2025, exceeding the preliminary estimate of 52.3 and up from 50.8 in April, indicating solid growth. Companies observed increased client spending, notably from domestic consumers as the business climate stabilized. Nonetheless, international demand continued to decline for the second consecutive month, influenced by tariff concerns and US trade policy issues. Businesses have been on a hiring spree for the third month in a row; however, staffing increases were insufficient to prevent a rise in backlogs, partly due to equipment delivery postponements related to tariffs. These delays, coupled with higher wages and rising supplier prices, led to input cost inflation reaching its peak since June 2023. In response, companies elevated their prices at the most rapid rate since August 2022. Despite these cost challenges, sentiment improved, with businesses planning investments in marketing and expansion over the coming year, buoyed by a more stable outlook.