US Services Sector Growth Dips To Lowest Point In Over A Year
Various political and economic factors have now shown their effects on the various sectors in the United States's economy. These factors include the ongoing trade war with China and the border issue under the Trump administration, among others. While the manufacturing sector in the country has slowly rebounded after months of slowed growth, the country's services sector has now reportedly fallen.
According to the latest data from the Institute for Supply Management, the overall growth in the country's services sector has now fallen to its lowest point since August 2017. The Non-Manufacturing ISM Report on Business, which is a domestic economic indicator and forecaster for the United States' services economy, fell to 56.1 points last month. That number is significantly lower than the 59.7 in February.
The number is significantly lower than what economists had initially forecasted for the month of March. Previous surveys conducted by Refinitiv had pegged the index to dip slightly to 58 points. According to the chair of the Institute for Supply Management, Anthony Nieves, the growth of the United States' non-manufacturing sector has someone slowed down in March after having experienced significant growth in February.
Nieves added that most are still quite optimistic about the country's business and economic conditions. However, some investors and economists are concerned about the country's capacity constraints and employment resources. Despite the slowed growth, the index itself still remains firmly in the expansion territory. This means that the overall economy is still growing, but just at a slower-than-expected rate. The overall data points to a slower consumer outlay for the first quarter of 2019, with retail reporting an outright decline.
Indices under the Non-Manufacturing Business Activity Index give analysts a more in-depth look at the recent fall. Key components of the index such as new orders fell by as much as 6.2 points to 59 points in March. Business activity also fell but is still in the upper 50s. Meanwhile, prices surged by as much as 4.3 points to 58.7 points during the same month.
Stock market prices reacted accordingly with the Non-Manufacturing ISM Report data, with the Dow Jones Industrial Average also dipping slightly into the red.
Data from the ADP and Moody's Analytics, which showed a lower increase in private payrolls, has also foreshadowed the disappointing ISM report. Analysts had expected a print of 173,000 but only got 129,000 last month. Private payrolls reports are used as a general preview of the country's monthly jobs report. The ISM report was also preceded by a lower than expected job data.