The S&P Global U.S. Composite PMI fell to 50.4 in February, signaling near-stagnation in the private sector. Services contracted, offsetting modest manufacturing growth, while new orders weakened and employment declined amid rising costs. Business optimism hit its lowest level since late 2022, driven by concerns over spending cuts, tariffs, and inflation.
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Consumer sentiment also declined, with the University of Michigan index dropping to 64.7, its weakest since November 2023. Buying conditions for durable goods plunged 19%, as fears of tariff-driven price hikes grew. Inflation expectations surged to 4.3%, the highest in over a year.

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The housing market struggled, with existing home sales down 4.9% in January, the sharpest drop in seven months. Despite multiple Fed rate cuts, mortgage rates remain high due to inflation concerns, keeping housing affordability low. Home prices fell 1.9%, while inventory increased, pointing to a cooling market.

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