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

(RTTNews) - A report released by the Institute for Supply Management on Tuesday showed a slight slowdown in the pace of growth in U.S. service sector activity in the month of April.

The ISM said its services PMI slipped to 53.6 in April after falling to 54.0 in March, although a reading above 50 still indicates growth. Economists had expected the index to edge down to 53.7.

The dip by the headline index partly reflected a notable slowdown in the pace of growth in new orders, as the new orders index tumbled to 53.5 in April from 60.6 in March.

"Ongoing commentary that increased ordering is related to getting ahead of future price increases seems to have been more applicable to March than April," said Steve Miller, Chair of the ISM Services Business Survey Committee.

The report said the backlog of orders index also edged down to 53.0 in April from 53.6 in March but remained in expansion territory for a third straight month for the first time since February 2023.

Meanwhile, the ISM said the business activity index rose to 55.9 in April from 53.9 in March. The employment index also climbed to 48.0 in April from 45.2 in March but continued to indicate contraction.

On the inflation front, the prices index came in at 70.7 in April, unchanged from March, amid sustained higher oil and fuel costs.

A separate report released by the ISM last Friday showed manufacturing activity in the U.S. expanded for the fourth consecutive month in April.

The ISM said its manufacturing PMI came in at 52.7 in April, unchanged from March. While a reading above 50 still indicates growth, economists had expected the index to inch up to 53.0.