Expansion in the American service sector slowed to its weakest rate of growth in nine months and new manufacturing orders fell at the steepest pace since last August according to two reports today.
The services purchasing managers’ index from the Institute for Supply Management (ISM) slid to 53.1 in April from 54.4 the prior month. It was below the 54.0 forecast and the poorest reading since last July. Readings above 50 mean activity expanded.
New orders to US factories dropped 4.0% in March, outstripping the -2.9% prediction and the revised 1.9% increase in February initially listed at 3.0%, according to the Census Bureau
All the ISM component indicies stayed positive though most declined on the month: employment dropped to 52.0 from 53.3 in March, new orders fell to 54.5 from 54.6, export orders fell to 53.5 from 56.5, business activity skidded to 55.0 in April from 56.5 and prices came down to 51.2 from 55.9. Only import orders and inventories gained, to 58.5 from 57.5 and to 56.0 from 51.5.
The rate of expansion in the service and manufacturing sectors as given in the ISM survey are commensurate with overall GDP growth of just under 2.0%.
Factory orders for non-defense capital goods in March, an oft used proxy for business investment, originally issued last month as part of the durable goods report was revised up to 0.9% from 0.2% now far ahead of the 0.3% forecast.
Chief Market Strategist