Service sector demand in the United States has essentially stagnated, and input costs are expected to drive inflation even higher.

```htmlGolden Ten Data reported on June 3 that Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, stated that although the US manufacturing economy has seen a surge in demand due to war-related supply and price concerns, driving preventive inventory accumulation, the situation in the services sector is very different. Over the past three months, demand in the services sector has essentially stalled, with momentum weakening significantly compared to the beginning of the year. The sluggish services economy is dragging down overall economic growth; according to PMI data, annualized growth for the second quarter so far is only slightly above 1%. The hardest-hit industries are those serving consumers, with order declines reaching the largest since the pandemic, attributed to rising energy prices squeezing consumer purchasing power and consumers postponing spending in response to rising service prices. However, order volumes in the business services sector have also declined from the start of the year, and financial services companies are facing pressure from higher interest rates. The input cost inflation reflected in the PMI suggests that consumer price inflation will further rise in the coming months; but on the other hand, weak demand growth and signs of a cooling labor market may help alleviate concerns about inflation intensifying further.```