U.S. Service Sector Growth Slows Amid Economic Concerns

The U.S. service sector continued to expand in January, supported by strong growth in manufacturing output, according to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence. However, the annualized growth rate of approximately 1.7% marks a slowdown compared to the expansion pace before December's deceleration. According to Jin10, businesses catering to consumers are increasingly reporting challenging operating conditions, with service demand declining in January after nearly stalling in December. This trend reflects low consumer confidence and pressures from the cost of living. While financial and business service providers have shown relative resilience, demand growth in these sectors is also beginning to weaken amid heightened concerns about economic prospects, often attributed to political uncertainty. Meanwhile, inflationary pressures within the service industry remain elevated.