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Expand chart
Data: Investing.com; Chart: Danielle Alberti/Axios

The U.S. economy has taken a significant hit so far in February, due in part to the coronavirus outbreak.

By the numbers: The all-important U.S. services sector contracted for the first time in four years, data released Friday from IHS Markit showed, and fell to its lowest level in more than six years.

  • The composite index, which includes services and manufacturing, dropped to its lowest in six years, ending a nearly four-year period of expansion.

Why it matters: The services sector accounts for more than two-thirds of the U.S. economy and held up remarkably well last year as the U.S.-China trade war ravaged manufacturing and sent the industry into recession.

Warning: The rate of decline for new business was the strongest in the history of the survey, dating back to October 2009, and total new orders fell for the first time in more than a decade, according to IHS Markit.

Reality check: Economists largely expect the negative impact of the coronavirus to recede after the second quarter, but IHS Markit chief economist Chris Williamson warned that it was not the only issue weighing on this month's readings.

"The deterioration in was in part linked to the coronavirus outbreak, manifesting itself in weakened demand across sectors such as travel and tourism, as well as via falling exports and supply chain disruptions."
"However, companies also reported increased caution in respect to spending due to worries about a wider economic slowdown and uncertainty ahead of the presidential election later this year."

But, but, but: Friday's reading was a flash estimate of the current month and IHS Markit, along with data provider ISM, will release a deeper look at February's manufacturing and services in early March.

Go deeper: Economists warn coronavirus risk far worse than realized

Go deeper

12 hours ago - World

Maximum pressure campaign escalates with Fakhrizadeh killing

Photo: Fars News Agency via AP

The assassination of Mohsen Fakhrizadeh, the architect of Iran’s military nuclear program, is a new height in the maximum pressure campaign led by the Trump administration and the Netanyahu government against Iran.

Why it matters: It exceeds the capture of the Iranian nuclear archives by the Mossad, and the sabotage in the advanced centrifuge facility in Natanz.

Scoop: Biden weighs retired General Lloyd Austin for Pentagon chief

Lloyd Austin testifying before Congress in 2015. Photo: Chip Somodevilla/Getty Images

Joe Biden is considering retired four-star General Lloyd Austin as his nominee for defense secretary, adding him to a shortlist that includes Jeh Johnson, Tammy Duckworth and Michele Flournoy, two sources with direct knowledge of the decision-making tell Axios.

Why it matters: A nominee for Pentagon chief was noticeably absent when the president-elect rolled out his national security team Tuesday. Flournoy had been widely seen as the likely pick, but Axios is told other factors — race, experience, Biden's comfort level — have come into play.

Updated 14 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: WHO: AstraZeneca vaccine must be evaluated on "more than a press release."
  2. Politics: Supreme Court backs religious groups on New York COVID restrictions.
  3. World: Thailand, Philippines sign deal with AstraZeneca for vaccine.
  4. Economy: Safety nets to disappear in December Black Friday shopping across the U.S., in photosAmazon hires 1,400 workers a day throughout pandemic.
  5. Education: National standardized tests delayed until 2022.