U.S. business growth in September slowed to its weakest pace in three months as tariffs pushed up costs and demand cooled

￰0￱ activity grew in September but at the weakest pace in three months, with softer demand limiting how much firms could raise prices even as tariffs added to their costs. S&P Global’s flash composite output index slipped by 1 point to 53.6, the group said Tuesday, still above the 50 line that signals ￰1￱ the measure of prices paid for materials climbed to a four-month high, the gauge of prices charged fell to the lowest since ￰2￱ costs in services increased to the highest since May. “Although tariffs were again cited as a driver of higher input costs across both manufacturing and services, the number of companies able to hike selling prices to pass these costs on to customers has fallen, hinting at squeezed margins but boding well for inflation to moderate,’’ Chris Williamson from S&P Global Market Intelligence said in a statement.

A pair of the firm’s composite indicators pointed to the slowest growth in new orders and in backlogs in three ￰3￱ business at service providers cooled, and bookings at factories barely ￰4￱ demand easing, the composite employment index slipped to a five-month ￰5￱ manufacturers, slower sales growth contributed to the largest build-up of finished-goods inventories in data back to 2007, the report ￰6￱ so, company expectations for demand over the next year improved, helped in part by hopes that borrowing costs will move ￰7￱ also remained upbeat that higher tariffs could support production at ￰8￱ warns Tariffs’ full impact on businesses still ahead Separately on Tuesday, the OECD warned that the full effect of President Donald Trump’s tariff increases “has yet to be fully felt” across the ￰9￱ organization projected global growth at 2.9% and ￰10￱ at 1.5% in 2026, down sharply from 3.3% and 2.8% in ￰11￱ Paris-based body said tariffs, immigration changes, and inflation are the main forces weighing on ￰12￱ fallout from trade measures is especially prominent, the OECD said.

“The impacts of higher tariff rates are yet to be fully felt in the US economy,” the report ￰13￱ organization noted that many tariff changes are phased in over time and that some firms have initially absorbed higher ￰14￱ so, signs of strain are emerging, citing the Federal Reserve’s decision last week to cut interest rates and Chair Jerome Powell’s observation that younger workers in particular are finding it harder to secure ￰15￱ also referenced a warning this week from former Trump economic adviser Gary ￰16￱ shock from trade barriers could arrive sooner The economic shock from higher trade barriers could arrive as soon as this year, the OECD said.

“Growth is expected to soften noticeably in the second half of this year, as front-loading activity unwinds and higher effective tariff rates on imports to the United States and China dampen investment and trade growth.” For the current year, however, the OECD lifted its global growth forecast to 3.2%, from 2.9% in June, and raised its ￰17￱ to 1.8% from 1.6%. Even with those upgrades, the group did not improve its outlook for next year and said the picture remains ￰18￱ upward revisions reflect companies’ efforts earlier this year to front-load trade ahead of tariff increases, the report ￰19￱ investments in artificial-intelligence companies have also supported the near-term outlook.

“Reductions in trade restrictions or faster development and adoption of artificial intelligence technologies could strengthen growth prospects,” the OECD ￰20￱ together, the PMI snapshot shows firms wrestling with rising costs and softer demand while holding the line on ￰21￱ OECD sees trade policy as a drag even as near-term growth gets a lift from front-loaded orders and ￰22￱ crypto news deserves attention - KEY Difference Wire puts you on 250+ top sites