WASHINGTON, Aug 4, 2018 (BSS/AFP) – The dominant US services sector
continued to grow in July, but at a slower pace as worsening trade tensions
continued to drive prices higher, according to an industry survey Friday.
And the largest segment of the economy continued to complain about
difficulty finding workers to fill open positions, with the US unemployment
rate now down to 3.9 percent.
The Institute for Supply Management said its monthly survey showed its
non-manufacturing index fell more than three points to 55.7 percent, due to a
sharp decline in production and as orders, including for exports, dropped
off.
The result, an 11-month low, was well below the average pace of the past
12 months, and fell far short of the consensus forecast — but still shows
expansion.
Any score above 50 percent indicates growth, and the sector has been
growing for 102 consecutive months.
“There has been a ‘cooling off’ in growth for the non-manufacturing
sector. Tariffs and deliveries are an ongoing concern,” said Anthony Nieves,
chair of ISM’s survey committee for the non-manufacturing sector.
However, “The majority of respondents remain positive about business
conditions and the economy,” Nieves said in a statement.
The latest data was released shortly after China threatened to impose
retaliatory tariffs on another $60 billion in US goods, and possibly take
other actions in response to President Donald Trump’s trade policies.
Trump this week announced he would increase duties to 25 percent rather
than the planned 10 percent on the next $200 billion in Chinese products to
be targeted.
In the services sector, only two of the 18 industries surveyed reported a
contraction last month, but the prices index jumped another three points.
While the healthcare sector and other services remained upbeat, others
continue to point to increasing trade concerns as a source of concern.
“Business is up overall but a lot of questions loom over the rest of the
year. These include concerns about international markets and the increasing
tariffs that impact the landed costs of goods,” a survey respondent in the
retail trade said.
“Expanding concerns with price increases due to tariff and global trade
policy changes and uncertainty,” another in professional services said.