US businesses slowed down in June, facing rising prices due to tariffs, leading to increased inflation.

From Yahoo Finance: 2025-06-23 09:48:00

U.S. business activity slowed in June, with prices rising due to Trump’s tariffs, pointing to increased inflation in the second half of the year. Tariffs were reported as the cause of higher input and selling prices by manufacturers in a survey by S&P Global.

Economists anticipate inflation to rise in June, following benign price readings. The flash U.S. Composite PMI Output Index slipped slightly to 52.8 this month, indicating expansion. The survey’s flash manufacturing PMI remained stable at 52.0, while the services PMI decreased to 53.1.

S&P Global’s survey revealed that the U.S. economy continued to grow in the second quarter, but uncertainty persists due to rising inflation. Hard data on retail sales and housing suggest a softening economy, exacerbated by the ongoing tariff policies and Middle East tensions.

The survey showed a decline in new orders and prices paid by businesses, but manufacturers faced higher input costs. Prices charged for goods and services remained high, especially for manufacturers passing on tariff costs to consumers. Rising oil prices due to Middle East tensions may further increase inflation.

The Federal Reserve maintained its benchmark interest rate last week, citing expectations of “meaningful” inflation. Analysts speculate that the Fed will continue to monitor the economy and inflation before making any changes. Employment increased, driven by manufacturing, with some optimism among manufacturers, though less upbeat than before Trump’s presidency.

Read more: US business activity moderates; price pressures building up