U.S. Services-Sector Activity Grew Slower in February -- Update
By Sharon Nunn
WASHINGTON -- Growth across U.S. service industries continued at a solid pace in February, a sign of health in the broader economy.
The Institute for Supply Management on Monday said its nonmanufacturing index fell to 59.5 in February. A reading above 50 indicates activity is expanding across service and other industries, while a number below 50 signals contraction.
Economists surveyed by The Wall Street Journal had expected a February reading of 59.0.
A sharp decline of 6.6 percentage points in the employment index to 55.0 "impeded the possible further expansion of the [overall] index," said Anthony Nieves, who oversees the ISM survey. "With such a high [January employment] reading, it's hard to maintain such a high level of growth from that level."
The details of Monday's report were largely upbeat despite the employment drop. The business activity and production index grew 3.0 percentage points, and the new-orders index also grew, increasing 2.1 points.
The prices index declined 0.9 percentage point, signaling prices are now growing at a slower pace.
Some 16 sectors reported growth during February, led by educational services and transportation and warehousing, while two sectors -- arts, entertainment and recreation and accommodation and food services -- reported contraction.
The overall U.S. economy is experiencing one of its most robust bouts of economic growth in recent years, with output in 2017 growing at its strongest annual pace in three years, buoyed by consumer and business spending.
Another ISM index that tracks the manufacturing sector surged in February to the highest level since 2004 as raw-materials prices rose quickly, the group said last Thursday.
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March 05, 2018 11:14 ET (16:14 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.