U.S. Business Activity Rises Amid Fears of Tariffs and Spending Cuts, Reports S&P Global

According to a recent report from S&P Global, while U.S. business activity is showing signs of rapid growth, concerns over tariffs and government spending cuts continue to dampen consumer outlooks. The latest survey indicates that prices paid by businesses for inputs have surged to their highest in two years, impacting both manufacturing and services sectors. Furthermore, companies are already indicating signs of reduced hiring levels. Chief Economist Chris Williamson at S&P Global Market Intelligence commented on the growing apprehensions regarding recent policy measures from the new administration, primarily citing issues surrounding federal spending cuts and tariffs. Despite these concerns, the S&P Global Composite PMI reflected an acceleration in economic activity, rising to 53.5 in March from 51.6 in February. Service sectors have seen particularly strong performance, with the Services PMI increasing from 51 to 54.3. While these improvements demonstrate strength, the Manufacturing PMI dipped below market expectations to 49.8, signaling a contraction. In the currency market, the U.S. Dollar Index experienced an increase following the PMI data release, although it remains sensitive to the broader economic implications of policy decisions and rumors about potential tariff announcements by the Trump administration. Concurrently, economic projections indicate that U.S. GDP growth may slow, with an annualized rate of 1.9% for March and 1.5% for the overall quarter. Amidst these economic indicators, global financial markets are reacting accordingly. Gold prices are stabilizing after recent fluctuations, and the S&P 500 index is riding on the strong PMI data to test session highs. Investors are advised to remain cautious of upcoming policy announcements that could further influence market dynamics.