The Middle East war intensifies demand shocks, slowing down the growth momentum of the U.S. service industry

CryptoWorld News: The impact of the Middle East war on demand has intensified, and U.S. service sector growth momentum has significantly slowed down. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, stated that after a slight decline in March, U.S. business activity has resumed growth, but since the beginning of the year, the growth momentum has clearly slowed. Survey data shows that the GDP annualized growth rate is about a modest 1%. For the first time in two years, the service sector reported a decrease in new business inflows, reflecting that the impact of the Middle East war on demand is worsening. The direct effects of the war are most evident in the service sector, where high prices have led to a decline in discretionary spending (such as vacations and entertainment), while high fuel costs and travel disruptions have also suppressed transportation activities. The decline in demand for financial services is partly related to rising market uncertainty and also reflects market expectations of higher inflation and interest rates impacting real estate and credit activities. Input cost inflation has further increased, with rising fuel prices, generally higher prices for goods and services, and rising wages. These factors will transmit to consumer inflation over the coming months.