Economic activity in the services sector fell back modestly in July as businesses held off on making purchases amid policy uncertainties.

The Institute for Supply Management’s purchasing manager’s index dropped 0.7 percent from June to reach a series level of 50.1 percent in July, just slightly above the break-even level of 50 percent, below which activity would be shrinking.

Institute chair Steve Miller said the report reflects “slow growth” in services, which includes industries like transportation, warehousing, retail, utilities and real estate.

Survey respondents cited tariffs as weighing on business conditions and delaying their ability to plan and make purchasing. Tariffs were the most frequently mentioned issue in the selected comments.

“Anticipation of the final tariff impacts

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