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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

4 mins ago - World

China and Russia vaccinate the world — for now

Illustration: Aïda Amer/Axios

While the U.S. and Europe focus on vaccinating their own populations, China and Russia are sending millions of COVID-19 vaccine doses to countries around the world.

Why it matters: China's double success in controlling its domestic outbreak and producing several viable vaccines has allowed it to focus on providing doses abroad — an effort that could help to save lives across several continents.

Ina Fried, author of Login
14 mins ago - Technology

Report: China will dominate AI unless U.S. invests more

Photo illustration: Axios Visuals. Photo: Krisztian Bocsi/Bloomberg via Getty Images

The U.S., which once had a dominant head start in artificial intelligence, now has just a few year's lead on China and risks being overtaken unless government steps in, according to a new report to Congress and the White House.

Why it matters: Former Google CEO Eric Schmidt, who chaired the committee that issued the report, tells Axios that the U.S. risks dire consequences if it fails to both invest in key technologies and fully integrate AI into the military.

Americans agree about more issues than they realize

Data: Populace Inc.; Chart: Michelle McGhee/Axios

Many Americans assume the rest of the country doesn't share their political and policy priorities — but they're often wrong, according to new polling by Populace, first seen by Axios.

Why it matters: The polling reveals that despite growing political polarization, Americans share similar long-term goals and priorities for the country.