WASHINGTON (Reuters) -U.S. business activity slowed marginally in June, though prices increased further amid President Donald Trump's aggressive tariffs on imported goods, suggesting that an acceleration in inflation was likely in the second half of the year.

The survey from S&P Global on Monday showed measures of prices paid by factories for inputs and charged for finished products jumped to levels last seen in 2022. Nearly two-thirds of manufacturers reporting higher input costs attributed these to tariffs while just over half of respondents linked increased selling prices to tariffs, S&P Global said.

That supports economists' expectations that inflation would surge from June following mostly benign consumer and producer price readings in recent months. Economists have argued that inflation has been slow to respond to Trump's sweeping import duties because businesses were still selling stock accumulated before the tariffs came into effect.

S&P Global's flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, slipped to 52.8 this month from 53.0 in May. A reading above 50 indicates expansion in the private sector.

The survey's flash manufacturing PMI was unchanged at 52.0. Economists polled by Reuters had forecast the manufacturing PMI easing to 51.0. Its flash services PMI dipped to 53.1 from 53.7 in May. Economists had forecast the services PMI falling to 53.0. The survey was conducted in the June 12-20 period, before the U.S. joined in the conflict between Israel and Iran.

"The June flash PMI data indicated that the U.S. economy continued to grow at the end of the second quarter, but that the outlook remains uncertain while inflationary pressures have risen sharply in the past two months," said Chris Williamson, chief business economist at S&P Global Market Intelligence.

So-called hard data on retail sales, housing and the labor market have painted a picture of an economy that was softening because of the uncertainty caused by the constantly shifting tariffs policy. The escalation in tensions in the Middle East added another layer of uncertainty.

INFLATION POISED TO ACCELERATE

The S&P Global survey's measure of new orders received by businesses declined to 52.3 from 53.0 in May. A measure of prices paid by businesses for inputs fell to 61.6 from 63.2 last month. But manufacturers faced higher input costs, with this price gauge jumping to 70.0 this month. That was the highest reading since July 2022 and followed 64.6 in May.

Prices paid for inputs by services businesses remained elevated, with tariffs, higher financing, wage and fuel costs cited. The pace of increase, however, slowed amid competition.

The survey's measure of prices charged by businesses for goods and services remained at lofty levels as manufacturers passed on the increased costs from tariffs to consumers. The prices charged gauge for manufacturers shot up to 64.5, the highest since July 2022, from 59.7 in May.

Rising oil prices because of the strife in the Middle East are seen contributing to higher inflation.

The Federal Reserve last week kept the U.S. central bank's benchmark overnight interest rate in the 4.25%-4.50% range, where it had been since December. Fed Chair Jerome Powell told reporters he expected "meaningful" inflation ahead.

"The data therefore corroborate speculation that the Fed will remain on hold for some time to both gauge the economy's resilience and how long this current bout of inflation lasts for," Williamson said.

Employment picked up this month, mostly driven by manufacturing, where some factories are experiencing order backlogs. S&P Global noted a slight rise in optimism among manufacturers "in part reflecting hopes of greater benefits from trade protectionism." 

It, however, added that "companies generally remained less upbeat than prior to the inauguration of President Trump."