Part 5/10:
Rising Signs of Economic Contraction
Another concerning development came from the Institute for Supply Management (ISM), which reported its service-sector activity index dipping below the pivotal 50 threshold, indicating contraction. Especially troubling was the sharp decline in new orders, a precursor to weaker economic activity in the short term.
The combination of weaker employment figures and contracting service sector activity suggests that the US economy is beginning to feel the weight of current trade policies and geopolitical tensions. Despite some easing of trade tensions recently, businesses remain cautious, and many are delaying investments and purchases amid ongoing uncertainty.