A US business activity almost stagnated in February Amid growing fears on import rates and deep cuts on federal government spending, erasing all gains obtained after President Donald Trump’s victory.
The drop in activity for a minimum of 17 months informed by S&P Global on Friday (21) was the latest in a series of research that suggests that companies and consumers are increasingly shaken by Trump government policies.
The trust of companies and consumers fired after the Republican’s victory on November 5, hoping for less strict regulations, tax cuts and low inflation.
“Companies report widespread concerns about the impact of federal government policies, ranging from spending cuts to geopolitical tariffs and events,” said Chris Williamson, S&P Global Market Intelligence’s chief business economist.
“Sales are being affected by the uncertainty caused by changes in the political scenario, and prices are rising amid price increases related to supplier tariffs.”
The Preliminary Compound Shopping Managers Index of S&P Global for the US, which accompanies the manufacturing and services sectors, fell to 50.4 this month. This was the lowest reading since September 2023 and was below 52.7 registered in January. A reading over 50 indicates expansion in the private sector.
The service sector was responsible for falling in PMI, contracting for the first time since January 2023.
The manufacturing activity has risen to a maximum of eight months, although this was attributed to the “anticipation of possible cost increases or supply shortage linked to tariffs”.
The preliminary manufacturing PMI rose from 51.2 in January to 51.6. Economists consulted by Reuters predicted reading of 51.5. The PMI of Services fell to 49.7, the first contraction in just over two years, compared to the 52.9 registered last month and expectation of 53.0.
