In May 2025, the U.S. services sector experienced its first contraction since June 2024, heightening concerns over economic growth.
Decline in Services PMI
The Institute for Supply Management (ISM) reported a contraction in the U.S. services sector for May 2025. The Services PMI stood at 49.9, indicating declining business activity and a drop in new orders. This marks the first decline since June 2024.
Expected ripple effects include increased cost pressures as the input price index for services rose to 68.7, its highest since November 2022.
Consequences of the Contraction and Market Observations
According to the survey, the New Orders Index dropped to 46.4 percent in May, a decrease of 5.9 percentage points from April's figure of 52.3 percent. This raised concerns regarding potential inflation as businesses endeavor to pass on the increased costs to consumers.
Overview of Current Cryptocurrency Market Trends
Historical contractions in the services PMI, such as those in 2024 and during the 2020 pandemic, often correlate with risk-off sentiments in global financial markets. For instance, Bitcoin (BTC) is currently trading at $104,701.27.
The price has fallen by 1.03% over the past 24 hours, with trading volume decreasing by 8.93%. Additionally, the price has risen by 26.34% over the last 60 days.
The contraction in the U.S. services sector raises significant questions about the health of the economy, which is also impacting the cryptocurrency market, creating a challenging investment landscape.
