By Ed Frankl
U.S. services activity cooled last month, as demand slowed and firms registered concerns about the consequences of President-elect Donald Trump's policies, including promised tariffs.
The Institute for Supply Management said Wednesday its services-activity purchasing managers' index ticked down to 52.1 in November from 56.0 in October, well below expectations of 55.6 from economists polled by The Wall Street Journal.
The result still marks an expansion since it was above the 50 no-change mark, albeit it showed slower growth than October. The services sector has registered expansion for 51 of the previous 54 months, ISM said.
All four of the main gauges that make up the indicator drove the decrease--weaker business activity, new orders and employment alongside shorter supplier deliveries--according to Steve Miller, chair of ISM.
However, most sectors reported business-activity growth, reinforcing the view of recent months that the services sector has returned to sustained growth, despite some seasonal impacts, he said.
"Not surprisingly, election ramifications and tariffs were mentioned often, with cautionary outlooks related to the potential impact on respondents' specific industries," he noted.
Recent Federal Reserve rate cuts, including the last one in November, haven't had the desired effect on mortgage rates, said one respondent to the survey from the construction sector.
"With election results mostly determined, [an] expansion of residential construction is anticipated, but the unknown effect of tariffs clouds the future," the respondent added.
Write to Ed Frankl at edward.frankl@wsj.com
(END) Dow Jones Newswires
12-04-24 1038ET
