US business activity rebounded in April, with the composite PMI rising from 50.3 to 52.0, the highest level in three months. The improvement suggests the economy has regained some momentum after a near-recession in March, although the overall pace remains modest. The data is largely consistent with the economy seeking to maintain annual growth well above 1%, with the huge services sector the main drag despite a return to expansion.
Industrialization drove the economy. The Purchasing Managers’ Index rose from 52.3 to 54.0, while production jumped from 53.2 to 55.7, the strongest in four years. However, much of the force seems precautionary. Companies reported “panic” and “emergency” buying of inputs, building inventories ahead of expected supply disruptions and price increases linked to the conflict in the Middle East and ongoing tariff pressures.
In contrast, the services sector remains weak. The PMI rose from 49.8 to 51.3, but demand growth is weak, with hesitation in spending across travel, finance and other services. Rising prices and the potential for tighter financial conditions are weighing on activity, keeping overall growth modest.
At the same time, inflationary pressures are accelerating sharply. Input costs and output prices rose at the fastest pace since mid-2022, driven by energy, commodities and higher wages.
| index | April | March |
|---|---|---|
| Composite PMI | 52.0 | 50.3 |
| Purchasing Managers Index (PMI) Services. | 51.3 | 49.8 |
| Manufacturing Purchasing Managers Index (PMI). | 54.0 | 52.3 |
| Manufacturing output | 55.7 | 53.2 |
The full release of the US Purchasing Managers’ Index (PMI) is here.
