NextFin news, On Thursday, September 25, 2025, reports confirmed that U.S. business growth decelerated notably in September, with both manufacturing and services sectors showing signs of weakness. This slowdown is attributed in part to the ongoing impact of tariffs imposed during the Trump administration.
Data from the S&P Global Flash U.S. Composite Purchasing Managers’ Index (PMI) revealed a decline to 53.6 in September from 54.6 in August, indicating continued expansion but at a reduced pace. The manufacturing sector experienced a sharper slowdown, with the Flash U.S. Manufacturing PMI dropping to 52.0 from 53.0, reflecting weaker new orders and output growth.
Tariffs implemented under the Trump administration have increased input costs for many U.S. firms. For example, some factories reported spending over $100,000 more monthly due to tariffs on imported materials, which has constrained their operational capabilities and investment potential.
The Organization for Economic Cooperation and Development (OECD) highlighted that the full effects of these tariffs have yet to be fully realized, as many companies continue to operate using stockpiled inventories. The effective U.S. tariff rate on imports has risen to 19.5%, the highest since 1933, which is expected to continue affecting trade and investment.
The services sector, while still expanding, showed signs of fatigue with the Flash U.S. Services PMI easing to 54.5 from 55.0. Businesses reported slower demand growth and inflationary pressures impacting consumer spending patterns. Many service providers have adjusted prices upward to offset higher costs, risking further dampening of demand.
Economic analysts noted that inflationary pressures remain a concern, with input costs elevated but companies facing limited ability to pass these costs fully onto consumers due to competitive and demand constraints.
Overall, the data suggest that the U.S. economy, while still growing, is experiencing a moderation in momentum as tariff-related cost pressures and global demand uncertainties weigh on business confidence and expansion plans.
These findings were reported by The Economic Times on September 25, 2025, based on the latest PMI data and OECD analysis.
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