US business momentum just hit a major speed bump—and tariffs are steering the wheel. S&P Global's latest flash composite index dropped to 51.2 in April, marking the weakest pace of growth since last year. Translation? America's economic engine is sputtering. Companies are getting slammed by higher import costs, a stubbornly strong labor market, and supply chain headaches—all while future output expectations just fell off a cliff, now sitting at their lowest level since late 2022.
Chris Williamson at S&P doesn't mince words: tariffs aren't just a speed bump, they're a brick wall for manufacturers. Any early wins are getting wiped out by a wave of rising prices and vanishing exports. Services, which have been holding up the show, are now losing steam too—especially as demand from overseas dries up. Manufacturing input costs are now rising at the fastest rate since mid-2022, and companies are jacking up their prices at the sharpest clip in over a year. That spells trouble for businesses relying on global supply chains and consumer spending.
There's one bright spot: the US housing market is showing signs of life, with new home sales jumping thanks to lower mortgage rates and aggressive sales incentives, mostly down South. But for most sectors, the heat is on. Export orders in services just saw their steepest drop since early 2023, and inflation pressures are showing no sign of letting up. Bottom line: investors need to stay nimble, as trade wars and shaky consumer sentiment could make this a bumpy ride for US markets.
