Business activity across the United States expanded at its slowest pace in ten months in February, according to the latest survey data released by S and P Global, signaling a broad cooling in both manufacturing and services sectors as companies navigate softer demand and persistent cost pressures.
The composite purchasing managers index, which tracks output across private sector firms, indicated continued growth but at a markedly reduced rate compared with previous months. Survey respondents cited weaker new orders, slower hiring momentum, and caution among clients as key factors weighing on performance. While activity remained above contraction territory, the deceleration raised fresh questions about the durability of the current economic expansion.
Manufacturing firms reported a slowdown in production growth, with some companies pointing to inventory adjustments and more restrained capital spending. Export demand also showed signs of moderation, reflecting global economic uncertainty and shifting trade conditions. Several manufacturers noted that while supply chain disruptions have eased compared with prior years, pricing pressures remain uneven across inputs.
The services sector, which has been a major driver of economic resilience, also recorded softer gains. Businesses in areas such as finance, hospitality, and professional services reported that clients are delaying non essential spending. Employment growth in services continued but at a slower pace, as firms expressed caution about long term demand trends.
Economists monitoring the data said the February survey suggests that higher borrowing costs and tighter financial conditions may be gradually dampening activity. Consumer spending remains a central variable, with households facing elevated living costs and interest rates that affect credit dependent purchases.
Despite the slowdown, analysts cautioned against interpreting the survey as evidence of an imminent downturn. The overall expansion remains intact, and some sectors continue to report stable conditions. However, the moderation underscores the delicate balance policymakers must maintain as they assess inflation, labor market strength, and broader growth dynamics.
Financial markets reacted with measured concern, with investors evaluating how softer business indicators could influence future monetary policy decisions. The Federal Reserve has emphasized its data driven approach, and updated survey findings are likely to factor into upcoming deliberations.
The February figures from S and P Global provide a snapshot of an economy that is still expanding but at a more restrained tempo. As companies adjust to evolving domestic and international conditions, the coming months will reveal whether the slowdown represents a temporary pause or the beginning of a more sustained shift in momentum.
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