US Business Activity Slows to 16-Month Low Amid Tariff Concerns

U.S. business activity slowed to a 16-month low in April, with the S&P Global Composite PMI falling to 51.2, signaling tepid growth largely due to a sharp drop in the services sector and ongoing uncertainty from escalating tariffs. Prices for goods and services surged as input costs rose at their fastest rate in over a year, fueling fears of stagflation—a combination of stagnant growth and rising inflation—that places the Federal Reserve in a difficult position. The slowdown was attributed to diminished domestic and export demand, with businesses citing client uncertainty, higher tariffs, and weakening economic conditions both at home and abroad. Manufacturing showed a modest gain, but export orders dropped, and firms became reluctant to hire, citing concerns about costs and labor availability. President Trump's protectionist trade policies, including sharply higher tariffs on Chinese imports and a universal tariff on most trading partners, have contributed to these pressures, prompting retaliatory measures from China and rattling investor confidence. The combination of slowing growth, rising costs, and policy uncertainty has led to deteriorating business sentiment and increased worries about the broader U.S. economic outlook.