The Markit U.S. Composite PMI Output Index dropped to 54.3 in February from 55.8 in January.
The reading signalled that private sector output growth moderated from the 14-month high recorded at the start of 2017.
Chris Williamson, chief business economist at HIS Markit suggested it could be an early sign of greater caution developing among businesses.
“The drop in the flash PMI numbers for February suggest that the post-election upturn has lost some momentum,” he said. “Growth of business output, new orders and hiring all waned, as did inflationary pressures. February also saw a sharp pull-back in business optimism about the outlook over the next 12 months, which suggests companies have become more cautious about spending, investing and hiring.”
“However, even with the February dip, the PMI remains at a level broadly consistent with the economy growing at a 2.5% annualized rate in the first quarter,” he added. “The survey’s employment index is meanwhile indicating that a respectable 165,000 jobs were added to the economy in February.”
