• The S&P Global Composite PMI fell to 53.6 in September, indicating a slowdown in overall private sector growth from the previous month's 54.6.
  • Manufacturing activity held steady, matching estimates at 52.0, while the Services PMI slightly missed forecasts, coming in at 53.9 against an expectation of 54.0.
  • Underlying the expansion, input price inflation accelerated, driven in part by tariffs and ongoing supply chain pressures.

A Moderating Pace

The US economy's growth momentum softened in September, according to the latest S&P Global PMI data. While the figures still signal expansion across both manufacturing and services sectors, the pace of growth has clearly decelerated from the more robust levels seen in recent months. The Composite PMI, a key barometer of overall private sector activity, dropped to 53.6 from 54.6 in August.

"The survey data are consistent with the economy growing at an annualized rate of approximately 2%, but the loss of momentum since the summer is a concern," commented a senior economist at S&P Global Market Intelligence. "The key question is whether this is a temporary lull or the start of a more sustained slowdown."

Sector-Specific Trends

The manufacturing sector's PMI reading of 52.0 matched analyst expectations, maintaining the expansionary trend that began earlier this year. This marks a continuation of the sector's rebound from the contractionary period of 2023-2024. However, the growth rate in services, which constitutes the bulk of the US economy, showed signs of tapering. The Services PMI of 53.9, though still firmly in growth territory, fell just short of the 54.0 consensus forecast.

Efforts to reach S&P Global for additional commentary on the sectoral breakdown were not immediately successful. The data suggests that while new orders and production continue to rise, the rate of increase has moderated. Businesses also reported a rapid accumulation of finished goods inventories, a sign that supply conditions have improved but which may also hint at some caution regarding future demand.

Inflationary Pressures Persist

A notable feature of the September report is the reacceleration of input cost inflation. Survey respondents frequently cited the impact of tariffs and lingering global supply chain issues as primary drivers. This has forced firms to increase their own output charges, potentially passing higher costs on to consumers.

Business confidence remains in positive territory, supporting continued hiring and investment. However, the combination of moderating growth and persistent cost pressures presents a complex picture for policymakers. The Federal Reserve will likely view these figures as indicative of an economy that is cooling but still facing inflationary headwinds, complicating the path for future interest rate decisions. Market watchers will be looking to subsequent data releases to see if September's moderation evolves into a more definitive trend.