Tariffs Cloud U.S. Services Sector Amid Economic Optimism

U.S. services sector growth decelerated in November, yet still signals robust economic health. Businesses face uncertainty over incoming tariffs from the Trump administration, expressing concerns about higher costs. Despite moderation, optimism persists in consumer spending and job growth amid broader economic expansion.

The U.S. services sector experienced a slowdown in growth during November, although it continued to maintain levels indicative of strong economic performance. According to a survey by the Institute for Supply Management, businesses voiced anxieties over the potential impact of tariffs under President-elect Donald Trump's administration, fearing cost increases.

Despite these concerns, the overall economic outlook remains positive. The Federal Reserve's Beige Book report highlighted that most U.S. central bank districts saw a slight uptick in economic activities in November, with businesses hopeful about rising demand in the future. Fed Chair Jerome Powell expressed optimism, stating the economy is in "remarkably good shape."

Although the nonmanufacturing purchasing managers index fell slightly, it still suggested growth in the sector, which forms more than two-thirds of the economy. Meanwhile, economists remain hopeful about consumer spending, particularly spurred by increased vehicle sales and continuing positive wage growth trends.

(With inputs from agencies.)