The U.S. services sector slowed for a second straight month in July, showing the continued decline in American economic activity.

Why it matters: It was the lowest reading for the sector, which makes up around 70% of the U.S. economy, since August 2016.

What they're saying: The Institute for Supply Management said respondents to its survey "indicated ongoing concerns related to tariffs and employment resources. Comments remained mixed about business conditions and the overall economy.”

The big picture: The manufacturing sector has been in decline all year and is officially in recession. The services sector is far more important to the overall health of the economy and had managed to remain strong despite the trade war.

However, Monday's data shows that it, too, may be heading toward contraction.

Yes, but: While the level of growth has been slowing, the services sector is still expanding and has been for 114 straight months.