The S&P Global Flash US Composite PMI slipped to 52.4 in January 2025, down from December's 55.4, marking the slowest expansion in the private sector in nine months, according to preliminary estimates.
US private sector growth slows to nine-month low
Growth in the manufacturing sector resumed after six months of contraction, with the PMI rising to 50.1 from 49.4 in December. Meanwhile, the services sector continued to expand, albeit at a slower pace, with the PMI easing to 52.8 from 56.8.
Business confidence remained strong, as firms' output expectations for the year ahead held at their highest levels since May 2022. Optimism was largely driven by positive sentiment surrounding the new government’s policies, which fueled the sharpest rate of hiring in two-and-a-half years.
Inflationary pressures intensified
However, inflationary pressures intensified, reaching a four-month high. Input costs and selling prices accelerated in both the manufacturing and services sectors, reflecting rising expenses that could weigh on profit margins and consumer spending. Despite these challenges, the private sector’s overall growth and upbeat outlook highlight resilience in the US economy as it navigates a complex macroeconomic environment.
