US services activity misses expectations, reflecting slow growth
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US services sector activity ticked down in July, survey data showed Tuesday, hovering at a level reflecting slow growth as President Donald Trump's tariffs this year impacted global industries.The Institute for Supply Management (ISM) services index edged down to 50.1 percent last month, from 50.8 percent in June.But the figure remains above the 50 percent mark indicating growth, even as the latest number missed expectations of 51.5 percent according to a Briefing.com consensus forecast."The Employment Index's continued contraction and faster expansion of the Prices Index are worrisome developments," said ISM survey chair Steve Miller in a statement.He added that both the new exports and imports indexes moved from expansion to contraction territory, providing "signals that tariff tensions are impacting global trade .""The most common topic among survey panelists remained tariff-related impacts, with a noticeable increase in commodities listed as up in price," Miller said.The business activity index remained in expansion but cooled from June's reading, as did the new orders index, the report showed.The employment index, however, was in contraction territory for the second straight month."Anticipation of the final tariff impacts is resulting in delayed planning for next fiscal year purchases," said a respondent in the accommodation and food services sector.Another respondent, in the agriculture industry, added that "higher tariffs are increasing the cost of imported feed ingredients and trace minerals for livestock and poultry feeds."Carl Weinberg, chief economist at High Frequency Economics, said in a note: "A slowing trend in service sector output is a cause for concern.""This report supports the view that the economy is gradually slowing," he added, although noting it does not yet call for monetary easing.
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