HONOLULU (KHON2) — The S&P Global Flash US PMI report for February 2025 shows that business growth in the United States slowed down.

The report measures how well the economy is doing in different areas, like manufacturing (factories) and services (businesses that provide help rather than products).

This month, the economy faced challenges, including rising costs, job losses, and uncertainty about government policies.

1. Slower business growth

The US economy nearly completely stalled in February. The Composite Output Index, which measures business activity, fell to 50.4. This is the lowest it has been in 17 months.

A number above 50 means the economy is growing, while a number below 50 means it is shrinking. This low number suggests that businesses are struggling to grow.

2. Services sector shrinks

The service industry, which includes things like restaurants, hotels and financial services, shrank for the first time in 25 months. The index for services dropped to 49.7, which is below 50. That means fewer customers were spending money on these services.

3. Manufacturing sees some growth

While services struggled, factories did a little better. The Manufacturing Output Index rose to 53.8, an 11-month high. Some of this increase came from businesses buying supplies early to avoid possible higher prices due to tariffs, which will add extra taxes on imported goods.

4. Higher costs for businesses

Businesses had to pay more for supplies, especially in manufacturing. The reason for this was tariffs and rising wages. Some companies had to raise their prices, but others tried to keep prices low to attract customers.

5. Fewer jobs available

Fewer people were hired in February and even more lost their jobs. This is the first time in three months that employment dropped. Service companies had to cut jobs because of lower demand, and factory jobs barely increased. And with fewer federal jobs to prop up the U.S. economy, the squeeze is getting firmer.

6. Worried about the future

Many businesses are unsure about what will happen in the future. The biggest concerns are government policies, tariffs and global issues. Businesses that were feeling hopeful at the start of the year are now more worried.

7. Inflation continues to be a problem

Prices for goods and services are still rising but at different speeds. In services, prices went up very slowly and reached their lowest increase in almost five years. However, manufacturing costs went up sharply because materials became more expensive.

This report is important because it helps people understand how the economy is doing. If businesses aren’t growing, it can lead to fewer jobs and higher prices.

When companies struggle, it can also affect how much people are able to spend. The report shows that while factories are still growing, the service sector is struggling; and businesses are feeling uncertain about the future.

The US economy is facing challenges in early 2025. Costs are rising, businesses are hiring fewer workers and people are spending less on services.

You can click here to read the full report.

The coming months will be important to see if the economy can recover or if things will get worse.