The S&P Global’s Flash US PMI data for March 2025 reported mixed economic news, with a notable jump in the service sector offset by declining manufacturing output. The S&P Global US PMI Composite Output Index reached a three-month high in March, rising to 53.5 from 51.6, according to the preliminary ‘flash’ reading. The Flash US Services PMI Business Activity Index also reached a three-month high, increasing to 54.3 from 51.0, driven by improved new business inflows and better weather. Meanwhile, the Flash US Manufacturing PMI fell into contraction, declining to 49.8 from 50, as factories reported lower output. Input buying also fell; however, export sales were lifted by rising orders from Canada, Germany, and other EU countries ahead of tariff implementation. Despite increased output growth in March, optimism about the coming year declined for the second consecutive month. Manufacturing optimism rose due to hopes for stronger demand, while service sector confidence fell for the third straight month due to concerns over the policy impacts of the new administration.

The U.S. Census Bureau reported that new orders for manufactured durable goods rose for the second consecutive month in February, increasing (+0.9%) to $289.3 billion following a (+3.3%) increase in January. Transportation equipment increased (+1.5%) to $98.3B, accounting for almost half the growth, as motor vehicles increased (+4.0%) and defense aircraft increased (+9.3%). Excluding transportation, new orders increased (+0.7%). Excluding defense, new orders grew (+0.8%). Shipments increased (+1.2%) to $292.3B, marking the third consecutive monthly rise. Inventories increased (+0.1%) to $533.2B, while unfilled orders grew (+0.1%) to $1,402.4 billion. Core capital goods orders, which exclude the volatile aircraft and defense orders, decreased (-0.3%); the decline followed an upwardly revised (+0.9%) reading for January. Core durable goods shipments increased (+0.9%); this follows a (-0.2%) reading for the previous month.

The U.S. Bureau of Economic Analysis (BEA), in its third estimate for real Gross Domestic Product (GDP) for the fourth quarter, reported an annual growth rate of 2.4%, up 0.1 percentage point from the second estimate and the 3.1% growth in Q3. The improvement reflected upward revisions to government spending and exports that were partly offset by downward revisions to consumer spending and investment. Consumer spending increased 4.0% (vs. 4.2% second estimate), with goods growing 6.2% (vs. 6.1%) and services growing 3.0% (vs. 3.3%). Government expenditures increased 3.1% (vs. 2.9%). Business investments declined 5.6% (vs. 5.7%), while residential investment increased 5.5% (slightly up from 5.4%). The trade deficit widened, negatively impacting GDP growth, with exports falling 0.2% (vs. 0.5%) and imports declining 1.9% (vs. 1.2%). The price index for gross domestic purchases increased 2.2% (vs. 2.3%). The PCE price index rose 2.4% (unchanged), and the PCE price index excluding food and energy prices rose 2.6% (vs 2.7%).