American economic expansion is running out of steam.
Slowing demand at a time of increasing Covid-19 cases, labor shortages and persistent nodes in transportation networks are hampering businesses in the United States and around the world, according to surveys from the private sector released Monday.
The most significant changes are happening in the United States, which has contributed to the global economic expansion since last year’s severe recession. US factories and service providers reported significantly slower growth in August, forecasting firm IHS Markit said in surveys of purchasing managers on Monday. Its activity index for the services sector, the largest segment of the economy, fell to 55.2 in August from 59.9 in July, hitting an eight-month low. The factory activity index fell to 61.2, a four-month low, from 63.4 in July. A reading above 50 suggests activity, as measured by sales, production, prices, and other factors, is growing.
But surveys show that the Delta variant of the Covid-19 virus, which has led to a new wave of infections and hospitalizations and frightened consumers, is hurting the economy.
“The expansion slowed down sharply again in August, as the spread of the Delta variant led to weakening demand growth, especially for consumer services, and further frustrated efforts by businesses to meet the needs of consumers. existing sales, ”Chris Williamson, chief economist at IHS. Markit, said.