Financial News: U.S. Services Index Indicates Slightly Faster Growth In

U.S. Services Index Indicates Slightly Faster Growth In April

05/03/2023 - 11:13:00 (RTTNews)

(RTTNews) - A report released by the Institute for Supply Management on Wednesday showed U.S. service sector activity grew at a slightly faster rate in the month of April.

The ISM said its services PMI crept up to 51.9 in April from 51.2 in March, with a reading above 50 indicating growth in the sector. Economists had expected the index to inch up to 51.8.

The uptick by the headline index was partly due to a faster rate of growth in new orders, as the new orders index climbed to 56.1 in April from 52.2 in March.

Meanwhile, the report showed the business activity index slid to 52.0 in April from 55.4 in March, indicating a slower pace of growth.

The employment index also edged down to 50.8 in April from 51.3 in March, although the reading above 50 still suggests modest job growth in the service sector.

On the inflation front, the prices index inched up to 59.6 in April from 59.5 in March, pointing to the 71st consecutive month of price growth.

"There has been a slight uptick in the rate of growth for the services sector, due mostly to the increase in new orders and ongoing improvements in both capacity and supply logistics," said Anthony Nieves, Chair of the ISM Services Business Survey Committee.

He added, "The majority of respondents are mostly positive about business conditions; however, some respondents are wary of potential headwinds associated with inflation and an economic slowdown."

A separate report released by the ISM on Monday showed U.S. manufacturing activity contracted for the sixth consecutive month in April, although the pace of contraction slowed by more than expected.

The ISM said its manufacturing PMI rose to 47.1 in April from 46.3 in March, with a reading below 50 indicating a contraction. Economists had expected the index to inch up to 46.6.

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