U.S. service industry activity slowed last month as lingering concerns about trade conflicts and worker shortages pushed production to its most bottom level in a decade, which could heighten fears in regards to the economy’s health.
Other data on Wednesday confirmed private employers hired the fewest workers in six months last month. The reviews came on the heels of data on Monday, exhibiting manufacturing activity reduced for the fourth month in November and a decline in development spending in October.
The continued manufacturing slump and second straight month-to-month plunge in construction outlay tempered growth estimations for the fourth quarter, which had been strengthened by a rush of upbeat reports on the trade deficit, housing, and enterprise investment. Nonetheless, the economy seems to be rising at a moderate pace rather than stalling.
Growth is being restrained by the Trump administration’s “America First” policy, which has seen the U.S. embroiled in a trade dispute with China and tit-for-tat levies with other countries. The commerce tensions, which have eroded business confidence, come as the stimulus from last year’s $1.5 trillion tax minimize package is fading.
The U.S. Institute for Supply Management said its non-manufacturing activity index dropped to a reading of 53.9 in November from 54.7 a year prior. A reading above 49 shows expansion in the services industry, which accounts for over two-thirds of U.S. economic activity.
Surveyed economists had forecast the index dipping to a reading of 54.5 last month. The survey’s production index tumbled 5.4 points to 51.6, the lowest level since November 2009, as tariffs on imports, including steel and aluminum, raising costs for companies. A measure of costs paid by services industries leaped 1.9 points to 58.5 in November.