NEW YORK – The vast U.S. services sector grew for a third straight month in April but lagged the pace of the previous two months, a report Friday showed, in another sign pointing to a temperate economic recovery.
The Institute for Supply Management, an industry trade group, said its monthly non-manufacturing index fell in April to 55.3 from 57.3 in March. It was the third consecutive month the index was above 50, indicating expansion in the non-industrial area of the economy that includes everything from transportation to legal and financial services.
Recent reports have pointed to a slowing in the pace of economic expansion following searing 5.8 percent annualized growth in the first three months of this year, as businesses ramped up production after a powerful inventory liquidation.
ISM's new orders index, a measure of future services activity, rose to 56.4 after falling to 54.9 in March. The employment index also rose in April to 48.9 from 45.5 in March, but at below 50, pointed to ongoing weakness in labor markets.
ISM compiles its non-manufacturing diffusion index by surveying more than 370 purchasing executives in more than 62 different service industries once a month. Responses reflect the change in the current month compared to the previous month. The non-manufacturing ISM Report is seasonally adjusted for business activity, new orders, imports, and employment.