Private-Sector Output Growth Reaches 6-Month Low as Price Pressures Intensify 'Noticeably,' S&P Survey Shows

12:45 PM EST, 12/16/2025 (MT Newswires) -- US private-sector output growth hit a six-month low in December as price pressures intensified "noticeably," according to S&P Global's (SPGI) flash purchasing managers' index released Tuesday.

The composite output index fell to 53 this month from 54.2 in November, representing its lowest point since June, the data provider said. The consensus was for a 53.9 reading in a survey compiled by Bloomberg. The 50-point mark separates expansion from contraction.

The gauge for services activity reached a six-month low of 52.9 from 54.1, while the manufacturing PMI hit a five-month low of 51.8 from 52.2. Wall Street was looking for readings of 54 and 52.1, respectively.

"While manufacturers continue to report higher output, lower sales point to unsustainable production levels which will need to be lowered unless demand revives in the new year," S&P Global Market Intelligence Chief Business Economist Chris Williamson said. "Service providers reported one of the slowest months for sales growth since 2023."

The S&P survey for December showed that price pressures picked up "noticeably," with average selling prices increasing at one of the steepest rates since the middle of 2022. Input cost inflation accelerated noticeably this month, hitting its fastest pace since November 2022, according to the report.

"Higher prices are again being widely blamed on tariffs, with an initial impact on manufacturing now increasingly spilling over to services to broaden the affordability problem," Williamson said.

Last week, Chicago Fed President Austan Goolsbee and his Kansas City counterpart, Jeffrey Schmid, said they dissented from a majority on the Federal Open Market Committee's latest decision to lower interest rates by 25 basis points due to inflation risks.

The S&P survey also showed the smallest gain in new business inflows for 20 months, while new orders for goods dropped for the first time in a year.

Companies have "lost some confidence" in the outlook and pulled back on their hiring in December amid a more challenging business environment, Williamson said. Employment growth decreased to a marginal level that was the lowest since September, according to the S&P survey.

"The flash PMI data for December suggest that the recent economic growth spurt is losing momentum," Williamson said. "With new sales growth waning especially sharply in the lead up to the holiday season, economic activity may soften further as we head into 2026."

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