Weak US Services Activity, ADP Hiring Signal Some Tariff Strain

Activity at US service providers unexpectedly contracted last month for the first time in nearly a year and companies throttled back hiring, indicating the grip on the economy from higher tariffs is getting tighter.

The Institute for Supply Management’s index of services dropped 1.7 points in May to 49.9 — a touch below the 50 level that separates expansion and contraction. A separate report from ADP Research showed private-sector payrolls rose just 37,000 last month, the least in two years.