The services sector in the United States continued its expansion in September, but at a considerably slower pace than expected, according to figures released Thursday morning.
The Institute for Supply Management's Non-Manufacturing Index released Thursday came in at 52.6, compared with an expected reading of 55.3 from economists surveyed by Dow Jones. It was the weakest reading since August 2016.
ISM officials said the overall weakness arose from fears over tariffs, labour resources and the general direction of the American economy. The news comes just two days after the ISM’s companion manufacturing index also showed substantial weakness.
The survey gauges the percentage of companies expecting to expand their businesses. Anything above 50 represents growth; a reading above 48.6 has been consistent with broader economic growth.
The report comes amid worries that the U.S. economy faces a recession as global growth slows and tariffs put a dent in business plans to expand. For example, one survey on Thursday found that just 23% of Americans believe the economy will improve in the next year, the lowest level of optimism in three years.
