U.S. Business Slowdown Amid Tariff and Spending Cut Concerns

U.S. business activity stagnated in February due to fears over tariffs and federal spending cuts, impacting gains from Trump's election. The S&P Global reported the lowest PMI reading since 2023, signaling widespread economic concerns. Consumers and businesses face inflation and uncertain policies, affecting sentiment and economic outlook.

Business activity in the United States nearly came to a halt in February as anxiety mounted over tariffs on imports and significant cuts in federal government spending. These concerns have largely erased the economic gains that followed Donald Trump's election victory.

According to a report by S&P Global, the U.S. Composite PMI Output Index fell to 50.4, reflecting the weakest expansion since September 2023. The services sector saw the first contraction since 2023, though manufacturing activity climbed to an eight-month high.

In the backdrop of these developments, the Trump administration's tariff policies have caused widespread unease. Coupled with federal spending cuts impacting several sectors, including homebuilding, inflation expectations among consumers have risen as businesses pass on higher costs.