U.S. business activity slowed in September for the second consecutive month. Firms absorbing import duties without raising prices, supporting economists’ view that tariffs won’t have a lasting impact on inflation. Fed Chair Powell anticipates a one-time increase in price level due to tariffs, with near-term inflation risks tilted upwards.

S&P Global’s survey shows a slip in the Composite PMI Output Index to 53.6, indicating expansion in the private sector. Manufacturing and services sectors experienced a slowdown, with input prices rising due to tariffs. However, businesses struggle to pass on higher costs to customers amidst weak demand and competition.

Consumer inflation expected to stay above the Fed’s 2% target in the coming months. The Fed recently cut interest rates in response to a weakening labor market. New orders saw a slight decline, particularly in manufacturing. Labor market conditions have softened, with nonfarm payrolls gains averaging only 29,000 jobs per month.

Read more at Yahoo Finance: US business activity cools further, no widespread price increases