The U.S. services sector continued to grow in January 2025, though at a slower pace than expected, highlighting uncertainty as businesses brace for potential tariff impacts.
The latest survey from the Institute for Supply Management revealed that the Services PMI fell to 52.8% in January, down from 54% in December, and below the 54.3% forecast by economists, as per TradingEconomics. While expansion persists, the slowdown suggests businesses are feeling pressure from rising costs and trade policy uncertainties.
Despite the overall softness, January marked the second consecutive month in which all four key subindexes—Business Activity, New Orders, Employment, and Supplier Deliveries—remained in expansion territory.
Yet, concerns over tariffs weighed on sentiment.
“Many panelists also mentioned preparations or concerns related to potential U.S. government tariff actions,” said Steve Miller, chair of ISM’s survey committee.
Industry respondents echoed these worries, with contacts in professional, scientific and technical Services indicating that the threat of tariffs is leading to higher price pressures. Respondents in real estate, rental, and leasing flagged concerns about the …
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