More from the article...

... The U.S. services sector's growth picked up in April, while a measure of prices paid by businesses for materials and services raced to the highest level in more than two years, signaling a building up in inflation pressures due to tariffs.

The Institute for Supply Management (ISM) survey on Monday showed services businesses were worried about the impact of President Donald Trump's tariffs on prices and deep federal spending cuts as his administration seeks to drastically shrink the government.

Trump's on-and-off again tariffs have heightened uncertainty over the once-resilient economy. Some real estate, rental and leasing firms in the ISM survey described the implementation of import duties as "maddeningly inconsistent."

Risks of a recession have risen. Trump on Sunday announced a 100% tariff on movies produced outside the United States.

"The negative impact on services activity and inflation from the tariffs and government spending cuts are very real and already beginning to materialize," said Scott Anderson, chief U.S. economist at BMO Capital Markets. "Without a hard pivot in U.S. tariffs and government spending cuts, we expect the ISM services readings to remain under downward pressure."

The ISM said its nonmanufacturing purchasing managers index (PMI) increased to 51.6 last month from 50.8 in March. Economists polled by Reuters had forecast the services PMI dipping to 50.2.

A PMI reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of the economy. The ISM associates a PMI reading above 49 over time with growth in the overall economy.

Efforts by businesses and households to get ahead of the import duties likely accounted for some of the rise in the services PMI last month. The ISM survey's new orders measure increased to 52.3 from 50.4 in March. ...