WASHINGTON — U.S. services sector activity remained in expansion territory in June while broader private-sector output continued to grow, according to purchasing managers' surveys released on Monday, adding to evidence that the economy maintained moderate momentum at the end of the second quarter despite lingering cost pressures.
S&P Global's final U.S. Services Purchasing Managers' Index (PMI) for June stood at 51.3, unchanged from its earlier flash estimate and above the 50-point threshold that separates expansion from contraction. The firm's Composite PMI Output Index, which combines manufacturing and services activity, remained at 52.2, also matching the preliminary reading and signaling continued growth in overall business activity.
The services reading marked a fourth-month high, while the composite index reached its strongest level in five months, according to S&P Global. The survey indicated that business activity continued to expand, supported by gains in manufacturing, although service-sector growth remained comparatively modest.
S&P Global said firms continued to report elevated input costs and selling prices during June. At the same time, survey respondents pointed to softer employment conditions, with hiring remaining subdued as businesses weighed uncertainty over demand and costs.
The PMI data were released alongside the Institute for Supply Management's June Services PMI, another closely watched measure of U.S. service-sector activity. The ISM index registered 54.3 for June, indicating continued expansion, although it was slightly below market expectations cited ahead of the release. A reading above 50 signals growth in the sector.
The services sector accounts for the largest share of U.S. economic output, making both the S&P Global and ISM surveys important gauges of business conditions. While the two reports differ in methodology and survey samples, investors and policymakers monitor them for indications of demand, employment trends and inflationary pressures.
The June PMI figures followed S&P Global's earlier flash estimates released in late June, which had already pointed to an acceleration in overall business activity driven by stronger manufacturing output while services expanded at a more measured pace.
Financial markets were also watching the data as they assessed the outlook for U.S. monetary policy following the June employment report released before the Independence Day holiday weekend. The PMI releases were among the first major economic indicators published after the holiday-delayed trading session and are expected to be considered alongside upcoming inflation data and Federal Reserve communications in evaluating the strength of the U.S. economy.
