United States service sector activity slowed in July, pressured by a reduction in new requests and an increase in input prices, reflecting potential obstacles because of the president’s aggressive (Republican) tariff agenda.
The index of non-maneufaturer purchasing managers of the Supply Management Institute for the month was 50.1, below the previous mark of 50.8. Economists had predicted a reading of 51.5.
A level above 50 indicates expansion, although the supply management institute associates a brand of non-monufacuer shopping managers over 49 over time with general economic growth.
Services represent a critical part of the US economy, responding for more than 2/3 of the activity.
The indicator of new requests from the Supply Management Institute fell to 50.3 from 51.3 in June, particularly dragged on a contraction in export requests for the 4th time in 5 months.
Inflation remained persistent, with the survey paid price index rising to 69.9 – the highest level since 2022.
“The most common theme among research participants continued to be the impacts related to tariffs, with a remarkable increase in the commodities listed with high prices”said Steve Miller, chairman of the Service Research Committee of the Supply Management Institute.
The numbers of this 3rd (5.ago.2025) may be a sign of future pressures about the economy during the 2nd semester of 2025. Recent data suggested that, although the US economy resumed growth in the 2nd quarter, consumer spending moderated, business investments decreased, and residential investments contracted – all potential warning signals for the rest of the year.
Meanwhile, the July Employment Report was weaker than the estimated and payroll revisions of the previous 2 months were strongly reduced, harming the hopes that the job market was resisting the tariff storm.
With information from .com Brazil
