While the Institute for Supply Management released a report on Friday showing that activity in the U.S. service sector saw continued growth in the month of January, the pace of growth in the sector slowed slightly compared to the previous month.
The ISM said its non-manufacturing index edged down to 56.5 in January from a revised 56.6 in December, although a reading above 50 still indicates growth in the service sector.
Economists had expected the service sector index to dip to 57.0 from the 57.2 originally reported for the previous month.
"The non-manufacturing sector begins 2017 with a cooling-off in the rate of growth month-over-month," said Anthony Nieves, chair of the ISM Non-Manufacturing Business Survey Committee. "The sector still reflects strong growth."
He added, "Respondents' comments are mixed indicating both optimism and a degree of uncertainty in the business outlook as a result of the change in government administration."
The modest decrease by the headline index was partly due to a notable slowdown in the rate of growth in new orders, as the new orders index dropped to 58.6 in January from 60.7 in December.
The business activity index also slipped to 60.3 in January from 60.9 in December, indicating a modest slowdown in the pace of growth.
On the other hand, the report said the employment index climbed to 54.7 in January from 52.7 in December, suggesting a faster rate of job growth in the service sector.
The Labor Department released a report earlier in the day showing employment in the service-providing sector increased by 192,000 jobs in January following the addition of 150,000 jobs in December.
The ISM also said the prices index climbed to 59.0 in January from 56.1 in December, indicating prices increased for the tenth consecutive month.
On Wednesday, the ISM released a separate report showing that growth in the manufacturing sector accelerated to the fastest rate in over two years in January.
The index of activity in the manufacturing sector rose to 56.0 in January from a revised 54.5 in December. Economists had been expecting the index to inch up to 55.0.
With the bigger than expected increase, the ISM's manufacturing index reached its highest level since November of 2014.
by RTT Staff Writer
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