S&P Global PMI Composite Falls to 51.4; Costs Climb Fastest in 10 Months
S&P Global Flash U.S. Composite PMI dipped to 51.4 in March, with input costs rising at the fastest pace in ten months and private sector employment contracting for the first time since February 2025. Markets now price minimal Fed rate cuts while factoring in elevated inflation risks, complicating monetary policy outlook.
1. Flash U.S. Composite PMI Dips to 51.4
In March, S&P Global’s Flash U.S. Composite PMI slid to 51.4 from February’s reading, signaling slower expansion in services and manufacturing combined but remaining above the 50 expansion threshold.
2. Input Costs Surge at Decade-High Pace
Input costs climbed at the fastest rate in ten months, driven by rising raw material and transportation expenses, putting pressure on corporate margins across multiple sectors.
3. Private Sector Employment Contracts
March saw private sector employment decline for the first time since February 2025, reflecting cautious hiring amid higher costs and slowing activity in both goods and services industries.
4. Market Reaction and Fed Policy Outlook
Following the PMI release, markets scaled back expectations for Federal Reserve rate cuts through year-end, factoring in persistent inflation risks and complicating the central bank’s monetary policy strategy.