US Services Sector Growth Misses Market Expectations
The recent release of the ISM non-manufacturing sector index from the USA has revealed a slowdown in the business activity generated from the services sector during March.
The data reveals that price pressure in the country is slowing down, and so is the pace of new orders being placed. Overall, the data shows an expansion of the services sector, but the expansion speed is below the economist's projections.
ISM Non-Manufacturing Sector Index Drops To 51.2
During March, the reading of the ISM non-manufacturing index touched 51.2. This was a lower reading than the last's month value of 55.1 during February. Similarly, the reading during January was recorded a 55.2.
Overall, this shows a trend of a slowdown in the services sector of the USA starting from January till March. But despite the gradual drop in the index, it is still above the mid-line of 50, which tells us expansion is still going on.
According to Anthony Nieves (ISM Chair), a pullback was witnessed in the services sector growth during the last few months.
In fact, the prices paid associated with the inputs have gone down to 59.5. Such a low value was only last seen in 2022, which tells us that things are not all good for the US services sector.
New orders received also went down from 62.6 during February to only 52.2 in March. According to experts, new orders from the services business are a major part of the US economy. So a gradual drop in new orders is also pointing towards a slow march towards the contraction.
According to experts, the overall trend of sales was healthy in the country, but there are some concerns about the country's uncertain economic outlook.
At the root of the trouble are an aggressive Fed and its commitment to raising interest rates. Although this policy has cooled down the prices, it is also affecting the USA economy as a whole.