U.S. Services Sector Slows Amid Tariff Concerns

In November, the U.S. services sector activity slowed but remained above levels indicative of strong economic growth. Potential tariffs from the incoming administration sparked concerns, impacting capital spending. Despite the dip, consumer spending stayed robust, with strong auto sales bolstering the economy.

The U.S. services sector experienced a slowdown in November, continuing its robust performance but showing signs of concern over potential tariffs from President-elect Donald Trump's administration. Businesses, wary of anticipated trade policies, are holding back on capital investments while awaiting further details.

The Institute for Supply Management (ISM) reported a slip in its nonmanufacturing purchasing managers' index to 52.1 last month, compared to a high of 56.0 in October. Despite this decrease, the sector remains in growth territory, signaling continued economic expansion for the fourth quarter.

Consumer spending, which underpins more than two-thirds of the economy, recorded strong numbers driven by increased auto sales. However, fears of tariff-induced price hikes loom, particularly affecting sectors such as construction and electronics.

(With inputs from agencies.)