S&P Global survey shows U.S. growth cooling in January as tariffs weigh on demand and hiring

A slower, uneven expansion

Fresh business surveys from S&P Global point to a cooling U.S. economy in January 2026, as tariff-related costs and softer demand continue to shape corporate decision-making. The services sector index edged slightly higher to 52.8 from 52.7 in December, while the manufacturing index held at 51.9—both still above the 50 threshold that indicates expansion, but signaling only moderate growth.

The data suggests the economy is not contracting broadly, but it is struggling to accelerate. Executives surveyed reported that price pressures and affordability concerns remain persistent, while many companies are cautious about adding staff amid uncertainty over trade policy and the durability of consumer and business spending.

Tariffs and costs remain central constraints

Businesses continue to cite tariffs as a major factor squeezing margins and complicating planning. Higher input costs can force companies to either raise prices—risking demand—or accept lower profitability. That tradeoff is especially acute in sectors where consumers can delay purchases or substitute cheaper alternatives.

S&P’s findings also indicate that manufacturers outside protected segments have felt the strain more sharply. Meanwhile, service providers reported limited improvement in new business, consistent with an economy that is still growing but at a pace that feels fragile for many employers.

What the survey implies for the months ahead

1. If tariffs remain elevated, cost pressures could keep inflation concerns alive even as growth cools.
2. Hiring may stay subdued if demand remains soft, especially in service industries that rely on discretionary spending.
3. Business optimism could improve if interest rates fall or if policy clarity reduces uncertainty.

Overall, the surveys portray an economy expanding at a modest clip—strong enough to avoid an immediate downturn, but constrained by policy-driven cost shocks and a cautious posture from firms that are waiting for clearer signals on demand and trade.