Economic activity in the United States continues to sink due to uncertainty in tariff policies.
New data from S&P Global Out on Wednesday showed its Flash Composite PMI output index captured activity in services and manufacturing, falling to 51.2 in April, reaching its lowest level in 16 months.
Manufacturing activity increased to 50.7 from 50.2 in March, while service activity fell to 51.4 from 54.4. A reading above 50 indicates an expansion of activity in the department; a reading below 50 indicates a contraction.
Sentiment about the coming year has dropped sharply, reaching its lowest level since July 2022 and the second highest since September 2020.
Meanwhile, the prices of goods and services “are rising by a year’s highest rate at more than a year.” The “specially dramatic increase” in manufacturing goods is related to higher tariffs.
Read more: What Trump’s tariffs mean to the economy and your wallet
“Early Flash PMI data in April showed a significant slowdown in business activity growth in the early second quarter, accompanied by optimism about the outlook,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. “At the same time, price pressures have increased, creating headaches for the central bank, which is facing increasing pressure to become weaker and weaker as inflation growth is about to rise.”
Williamson added that confidence in the business situation in the coming year has deteriorated, “sincerely thanks to growing concerns about the impact of recent government policy announcements.”
Wednesday’s data is the latest in a series of weak surveys on manufacturing and services activities. A survey of manufacturing activity by the Richmond Federal Reserve on Tuesday showed that the compound manufacturing index fell to -4 at -13 in April. Meanwhile, new orders for this month fell to -15, well below -4 in March. Also on Tuesday, the Philadelphia Fed’s non-manufacturing business outlook survey fell to -42.7, the lowest reading since May 2020.
The data came after last week’s Philadelphia Fed’s manufacturing business outlook survey, and general activity in the industry fell to an index reading of -26 in April, the lowest reading since April 2023, well below the 12.5 readings the previous month. The sharp drop in April marked the fourth largest monthly decline in history, down only in 2020 and 2008.
