empty
 
 

2023.06.0514:51:00UTC+00U.S. Service Sector Growth Slows More Than Expected In May

Service sector activity in the U.S. saw only modest growth in the month of May, according to a report released by the Institute for Supply Management on Monday, with the index of activity in the sector falling by more than expected.

The ISM said its services PMI fell to 50.3 in May from 51.9 in April, although a reading above 50 still indicates growth in the sector. Economists had expected the index to edge down to 51.5.

The bigger than expected decrease by the headline index was partly due to a slowdown in the pace of growth in new orders, as the new orders index slid to 52.9 in May from 56.1 in April.

The employment index also dropped to 49.2 in May from 50.8 in April, indicating a decrease in service sector jobs following three consecutive months of growth.

The report also showed the business activity index edged down to 51.5 in May from 52.0 in the previous month.

"There has been a pullback in the rate of growth for the services sector," said Anthony Nieves, Chair of the ISM Services Business Survey Committee. "This is due mostly to the decrease in employment and continued improvements in delivery times (resulting in a decrease in the Supplier Deliveries Index) and capacity, which are in many ways a product of sluggish demand."

The supplier deliveries index slipped to 47.7 in May from 48.6 in April, with a reading below 50 indicating faster deliveries.

Nieves added, "The majority of respondents indicate that business conditions are currently stable; however, there are concerns relative to the slowing economy."

On the inflation front, the prices index fell to 56.2 in May from 59.6 in April, suggesting a slowdown in the pace of price growth.

The ISM released a separate report last Thursday showing U.S. manufacturing activity contracted at a slightly faster rate in the month of May.

The ISM said its manufacturing PMI slipped to 46.9 in May from 47.1 in April, with a reading below 50 indicating a contraction. Economists had expected the index to edge down to 47.0.

  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $8000 more!
    In March we raffle $8000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS


Can't speak right now?
Ask your question in the chat.
Widget callback