U.S. Service Sector Grows At Slower Rate In January

Growth in the U.S. service sector slowed in the month of January, the Institute for Supply Management revealed in a report released on Wednesday.

The ISM said its non-manufacturing index dropped to 53.5 in January from an upwardly revised 55.8 in December, although a reading above 50 still indicates growth in the service sector.

Economists had expected the index to inch up to 55.5 from the 55.3 originally reported for the previous month.

Anthony Nieves, chair of the ISM Non-Manufacturing Business Survey Committee, said, “The majority of the respondents’ comments are positive about business conditions; however, there is a concern that exists relative to global conditions, stock market volatility, and the effect on commercial and consumer confidence.”

The decrease by the non-manufacturing index was partly due to a steep drop by the business activity index, which tumbled to 53.9 in January from 59.5 in December.

The new orders index also slid to 56.5 in January from 58.9 in December, while the employment index slumped to 52.1 from 56.3.

The ISM also said the prices index fell to 46.4 in January from 51.0 in December, indicating prices decreased for the third time in the last five months.

On Monday, a separate report from the ISM showed that U.S. manufacturing activity contracted for the fourth straight month in January.

The ISM said its purchasing managers index inched up to 48.2 in January from a downwardly revised 48.0 in December, but a reading below 50 continues to indicate a contraction in manufacturing activity.

Economists had expected the index to climb to a reading of 48.3 from the 48.2 originally reported for the previous month.

Published: 2016-02-03 14:25:00 UTC+00

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