Service side of economy shrinks for first time in almost a year — another trade war casualty

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ISM index turns negative for first time since summer 2024

Last Updated: June 4, 2025 at 10:53 a.m. ET
First Published: June 4, 2025 at 10:11 a.m. ET

Visitors enjoy the sights in the Little Havana neighborhood in Miami, Florida. Yet tourism has taken a hit from a decline in foreign visitors because of U.S. trade wars.

Visitors enjoy the sights in the Little Havana neighborhood in Miami, Florida. Yet tourism has taken a hit from a decline in foreign visitors because of U.S. trade wars. Photo: Getty Images

The large service side of the U.S. economy contracted in May for the first time in almost a year, another victim of ongoing trade wars that have frozen hiring and caused havoc among businesses.

The services index of the Institute for Supply Management fell to 49.9% in May from 51.6% in April, the ISM said Wednesday. Any number below 50% signals contraction.

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