Service sector claws back after COVID shift toward goods
Add Axios as your preferred source to
see more of our stories on Google.
The economy continues to shift away from buying and selling goods — which was big during and after the pandemic — and back toward services, traditionally the driver of the U.S. economy.
Why it matters: Focusing on the slowdown in manufacturing, or falling commodities prices — such as crude oil — may obscure the importance of the service economy. That gives a false impression of how the economy is doing overall.
Be smart: Services — haircuts, restaurant meals, IT consulting, lending money and a vast swath of other activities in which people pay other people to do things for them — accounts for over 70% of the U.S. economy.
The latest: Updates this week from the Institute for Supply Management's surveys of manufacturing and services activity confirm the growing distinction between these two parts of the economy.
- Manufacturing is clearly contracting, while services activity remains above the threshold — 50 — that separates shrinking from expansion.
The bottom line: The uptick in services, since it's such a large part of the economy, could outweigh the downward momentum we're seeing in goods.
