U.S. Service Sector Growth Unexpectedly Slows In April
May 04 2022 - 5:41AM
RTTF2
The Institute for Supply Management released a report on
Wednesday showing an unexpected slowdown in the pace of growth in
U.S. service sector activity in the month of April.
The ISM said its Services PMI fell to 57.1 in April from 58.3 in
March, although a reading above 50 still indicates growth in the
sector. The decrease surprised economists, who had expected the
index to inch up to 58.5.
Anthony Nieves, Chair of the ISM Services Business Survey
Committee, said the pullback by the index was mostly due to the
restricted labor pool and the slowing of new orders growth.
The report showed the employment index slid to 49.5 in April
from 54.0 in March, while the new orders index slumped to 54.6 from
60.1.
Meanwhile, the business activity index climbed to 59.1 in April
from 55.5 in March, indicating an acceleration in the pace of
growth.
"Business activity remains strong; however, high inflation,
capacity constraints and logistical challenges are impediments, and
the Russia-Ukraine war continues to affect material costs, most
notably of fuel and chemicals," said Nieves.
The report also showed the prices index inched up to a record
high of 84.6 in April from 83.8 in March, suggesting prices
increased at a modestly faster pace.
The supplier deliveries index also rose to 65.1 in April from
63.4 in March, while the inventories index crept up to 52.3 from
51.7.
On Monday, the ISM released a separate report showing growth in
U.S. manufacturing activity unexpectedly slowed in the month of
April.
The ISM said its manufacturing PMI fell to 55.4 in April from
57.1 in March. While a reading above 50 still indicates growth in
the sector, economists had expected the index to inch up to
57.6.
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