America’s manufacturing slowdown may be spilling over to the rest of the economy

The US service sector grew in September at the weakest pace in three years, raising concerns that manufacturing troubles are spilling over into the broader economy.

The Institute for Supply Management said on Thursday that its non-manufacturing index dropped to 52.6 last month, down from 56.4 in August. It’s the lowest reading since August 2016.

Businesses expressed concern about tariffs, a shortage of workers and the direction of the economy, ISM said.

The bleak report reinforces recession fears because the service sector makes up the bulk of America’s economy. The Dow dropped about 300 points, or 1.1%, minutes after the report was released.