Another blow to the U.S. economy came Thursday morning as new data found growth in the U.S. service industry fell to its lowest point in three years.
The Institute for Supply Management (ISM), a non-profit trade association, reported that the service sectors, while continuing to expand, slowed their growth in September by 3.8 percent compared to the month prior.
“The non-manufacturing sector pulled back after reflecting strong growth in August,” said Anthony Nieves, chairman of the ISM's Non-Manufacturing Business Survey Committee.
Exacerbating already steep loses this week, the Dow Jones Industrial Average fell over 300 points following the reports release Thursday. The S&P and the Nasdaq indexes dropped by over 1 percent. Stocks, however, quickly recovered the losses by mid-morning.
A separate ISM report released Tuesday had already sent the markets tumbling on reports that the U.S. manufacturing sector contracted for the second straight month.
The ISM’s two reports add to the growing concern by governments and markets that a global economic slowdown is on the horizon. Already, the U.S. Federal Reserve has slashed interest rates twice in recent months to spur economic growth and sustain expansion.
Nieves added that the service industries are largely concerned about “tariffs, labor resources and the direction of the economy.” Overall, ISM found that 13 sectors reported growth in September including retail; finance and insurance; and transportation and warehousing. Educational services and the category of other services, which encompasses everything from pet care to dry-cleaning, contracted last month.
Consumer spending, however, is expected to increase during the coming holiday season.
“The U.S. economy is continuing to grow and consumer spending is still the primary engine behind that growth,” Matthew Shay, president and CEO of the National Retail Federation (NRF), said in a statement Thursday. “Nonetheless, there has clearly been a slowdown brought on by considerable uncertainty around issues including trade, interest rates, global risk factors and political rhetoric.”
The NFR said that it expects holiday retail sales in the coming months to increase by roughly 4 percent compared to the year prior.
Shay added that while consumers are in “good financial shape” for shopping, “confidence could be eroded” if the aforementioned risks intensity.
The Rev. Al Sharpton is set to lead a protest march on Wall Street to urge corporate America to resist the Trump administration’s campaign to roll back diversity, equity and inclusion initiatives. The New York civil rights leader will join clergy, labor and community leaders Thursday in a demonstration through Manhattan’s Financial District that’s timed with the anniversary of the Civil Rights-era March on Washington in 1963. Sharpton called DEI the “civil rights fight of our generation." He and other Black leaders have called for boycotting American retailers that scaled backed policies and programs aimed at bolstering diversity and reducing discrimination in their ranks.
President Donald Trump's administration last month awarded a $1.2 billion contract to build and operate what's expected to become the nation’s largest immigration detention complex to a tiny Virginia firm with no experience running correction facilities.
Chipmaker Nvidia is poised to release a quarterly report that could provide a better sense of whether the stock market has been riding an overhyped artificial intelligence bubble or is being propelled by a technological boom that’s still gathering momentum.
Cracker Barrel said late Tuesday it’s returning to its old logo after critics — including President Donald Trump — protested the company’s plan to modernize.
Low-value imports are losing their duty-free status in the U.S. this week as part of President Donald Trump's agenda for making the nation less dependent on foreign goods. A widely used customs exemption for international shipments worth $800 or less is set to end starting on Friday. Trump already ended the “de minimis” rule for inexpensive items sent from China and Hong Kong, but having to pay import taxes on small parcels from everywhere else likely will be a big change for some small businesses and online shoppers. Purchases that previously entered the U.S. without needing to clear customs will be subject to the origin country’s tariff rate, which can range from 10% to 50%.
Southwest Airlines will soon require plus-size travelers to pay for an extra seat in advance if they can't fit within the armrests of one seat. This change is part of several updates the airline is making. The new rule starts on Jan. 27, the same day Southwest begins assigning seats. Currently, plus-size passengers can pay for an extra seat in advance and later get a refund, or request a free extra seat at the airport. Under the new policy, refunds are still possible but not guaranteed. Southwest said in a statement it is updating policies to prepare for assigned seating next year.
Cracker Barrel is sticking with its new logo. For now. But the chain is also apologizing to fans who were angered when the change was announced last week.
Elon Musk on Monday targeted Apple and OpenAI in an antitrust lawsuit alleging that the iPhone maker and the ChatGPT maker are teaming up to thwart competition in artificial intelligence.
