US Service Sector Expands in February; Price Growth Accelerates
The US services sector unexpectedly expanded in February, driven by a combination of rising prices for inputs and an increase in domestic demand. However, the surge in costs could be exacerbated by the recent tariffs on imports from Mexico, Canada, and China, which may further fuel inflation concerns. The Institute for Supply Management's non-manufacturing purchasing managers index (PMI) rose to 53.5 last month, a reading above 50 that indicates growth in the services sector.
- The surprise expansion of the US services sector highlights the resilience of domestic demand amidst global economic uncertainty, raising questions about the effectiveness of monetary policy in addressing inflationary pressures.
- How will the ongoing supply chain disruptions and tariffs impact the ability of businesses to pass on increased costs to consumers, and what implications might this have for consumer spending patterns?