Activity in the U.S. service sector grew at a slightly slower rate in the month of February, according to a report released by the Institute for Supply Management on Monday.
The ISM said its non-manufacturing index edged down to 59.5 in February from 59.9 in January, although a reading above 50 still indicates growth in the service sector. Economists had expected the index to dip to 59.0.
The modest decrease by the index was partly due to a slowdown in the pace of job growth in the service sector, as the employment index dropped to 55.0 in February from 61.6 I January.
The prices index also slipped to 61.0 in February from 61.9 in January, indicating a modest slowdown in the pace of price growth.
On the other hand, the new orders index rose to 64.8 in February from 62.7 in January, and the business activity index climbed to 62.8 from 59.8.
“According to the NMI, 16 non-manufacturing industries reported growth,” said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee. “The non-manufacturing sector reflected the second consecutive month of strong growth in February.”
“The decrease in the Employment Index possibly prevented an even stronger reading for the NMI composite index,” he added. “The majority of respondents’ continue to be positive about business conditions and the economy.”
Last Thursday, the ISM released a separate report showing its index of activity in the manufacturing sector rose to a nearly fourteen-year high in February.
The ISM said its purchasing managers index climbed to 60.8 in February from 59.1 in January, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to edge down to 58.7.
With the unexpected increase, the purchasing managers index reached its highest level since hitting 61.4 in May of 2004.