Economists: Weak demand combined with extreme weather pushes US service sector expansion to a ten-month low.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, pointed out that the PMI survey in the United States in February reflected that the trade environment for businesses has become increasingly challenging since the beginning of this year. The growth in demand from domestic and overseas clients has slowed down, combined with severe weather conditions in many states, leading to the smallest increase in service sector activities in ten months. In addition to the significant slowdown in manufacturing output growth in February, the weak performance of the service sector indicates that the annualized economic growth rate in the first quarter of this year is slightly below 1.5%. However, if there is a rebound in March following improved weather conditions, the situation is expected to improve to some extent. Nevertheless, due to concerns about government policies, business optimism for the next year remains low. Particularly in the service sector, the impact of tariffs is widely seen as a negative factor; while in labor-intensive industries such as leisure and entertainment, they continue to be hit by labor shortages, high costs, and consumer confidence.