Business activity in the US service sector fell last month for the first time since 2013, hurt by the coronavirus, according to a survey.
The drop came amid a “notable worsening” in the services sector, which includes finance and retail, the IHS Markit research firm reported.
New orders received by private sector firms also declined for the first time since 2009, it said.
US financial markets fell sharply following the report.
The latest IHS Markit/CIPS purchasing managers’ index data found that services business activity fell to 49.4, from 53.4 in January, while manufacturing output slowed to 50.8, compared to 51.9 in January, a six-month low.
The combined score was 49.6, down from 53.3 in the opening month of 2020. Anything below 50 indicates contraction.
The report added to fears spurred by recent trends in the bond markets, which suggest investors see the risks of holding short and long-term government debt as increasingly similar. That comparison is often tracked as an indicator of possible recession.
The blue chip Dow Jones Industrial Average fell about 0.7%, while the S&P 500 dropped about 0.9% and the tech-heavy Nasdaq was more than 1% lower.
Investors also turned to US government debt, considered a less risky investment, driving the prices up and yields on bonds down.
The IHS survey found that manufacturing output was hurt by delivery delays from China, while services industries such as travel also took a hit.