(RTTNews) – U.S. service sector activity unexpectedly grew at a slower pace in February, according to a report released Thursday by the Institute for Supply Management.
The ISM said its services PMI fell to 56.5 in February from 59.9 in January. While a reading above 50 still indicates growth in the services sector, economists expected the index to hit 61.0.
The services PMI declined for the third consecutive month after hitting a record high of 68.4 in November 2021.
The unexpected drop in the headline index came as the new orders index fell to 56.1 in February from 61.7 in January and the business activity index fell to 55.1 from 59. ,9.
The employment index also fell to 48.4 in February from 52.3 in January, indicating a decline in employment in the service sector.
“While there was a pullback for most of the indices making up the services PMI in February, growth continues for the services sector, which has expanded for all but two of the past 145 months,” said Anthony Nieves, president of the ISM Services Business Survey. Committee.
“Respondents continue to be impacted by supply chain disruptions, capacity constraints, inflation, logistical challenges and labor shortages,” he added. “These conditions have affected the ability of panelists’ businesses to meet demand, resulting in slower business activity and economic growth.”
The report shows the supplier shipments index fell from 65.7 in January to 66.2 in February, with a reading above 50 indicating slower shipments, while the inventory index fell from 49, 4 to 50.8.
On the inflation front, the price index rose to 83.2 in February from 82.3 in January, indicating a slight acceleration in the pace of price growth.
The ISM on Tuesday released a separate report showing a modest acceleration in the pace of growth in US manufacturing activity in February.
The manufacturing PMI fell from 57.6 in January to 58.6 in February, as economists expected the index to hit 58.0.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.