US Services Growth Slows as S&P Global PMI Falls to 51.7 in February

The S&P Global Services Purchasing Managers’ Index for the United States fell to 51.7 in February 2026, indicating that the country’s services sector continued to expand but at a noticeably slower pace than in the previous month.

The February reading declined from 52.7 recorded in January, while also coming in below both the flash estimate of 52.3 and market expectations of around 53. Although the index remained above the crucial 50 threshold that separates expansion from contraction, the latest data signals a cooling in momentum across the services economy.

The Purchasing Managers’ Index (PMI) is a key economic indicator used by economists and investors to gauge the health of business activity. It tracks several components including business output, new orders, employment, input costs and pricing trends. Because services represent the largest share of the U.S. economy, movements in the services PMI are closely monitored as a signal of broader economic conditions.

February’s weaker reading was largely driven by slower growth in new business demand. Companies reported that new orders expanded at a softer pace compared with earlier months, which directly affected overall activity levels across service industries.

Another factor weighing on the index was a decline in export orders, reflecting weaker international demand. Businesses cited uncertainty related to global trade conditions and potential retaliatory tariffs as factors affecting overseas demand for services.

The February figure also represents the slowest pace of expansion in roughly ten months, highlighting that the services sector is entering a phase of moderated growth after a stronger period of activity.

Despite the slowdown in demand, companies continued to increase employment levels during the month. Businesses reported that hiring remained stable as it became somewhat easier to fill open positions compared with previous months.

At the same time, input costs remained elevated, which led to continued increases in service prices. Rising costs and pricing pressures remain key concerns for businesses and policymakers, especially as inflation dynamics continue to influence economic outlook and monetary policy discussions.

The services sector includes a broad range of industries such as finance, real estate, business services, transport, communication and consumer-facing businesses, making it the dominant component of the U.S. economic structure.

Because of its importance, shifts in services activity often provide an early signal about changes in economic momentum and future growth trends.

Looking ahead, businesses remain cautiously optimistic about future activity levels. Firms reported improving sentiment supported by expectations of stronger economic conditions, potential tax benefits and policy support later in the year.

However, the weaker February PMI reading indicates that while the U.S. economy continues to expand, the pace of growth in the services sector is gradually moderating, a trend that markets and policymakers will watch closely in the coming months.