A report released by the Institute for Supply Management on Wednesday showed a modest slowdown in the pace of growth in activity in the U.S. service sector in the month of March.
The ISM said its non-manufacturing index dipped to 58.8 in March from 59.5 in February, although a reading above 50 still indicates growth in the service sector. Economists had expected the index to edge down to 59.0.
The decrease by the headline index was primarily due to a significant slowdown in the pace of new orders growth, as the new orders tumbled to 59.5 in March from 64.8 in February.
The business activity index also fell to 60.6 in March from 62.8 in February, indicating a notable slowdown in the pace of growth.
On the other hand, the report said the employment index rose to 56.6 in March from 55.0 in February, suggesting an acceleration in the pace of job growth in the service sector.
The ISM said the prices index also crept up to 61.5 in March from 61.0 in the previous month, pointing to a modest acceleration in the pace of price growth.
“Despite the slight dip in the NMI composite index, the non-manufacturing sector enjoyed another month of strong growth in March,” said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee.
“The cooling off of the New Orders Index possibly prevented an even stronger reading for the NMI composite index,” he added. “The majority of respondents remain positive about business conditions.”
On Monday, the ISM released a separate report showing activity in the manufacturing sector grew at a slower than expected rate in the month of March.
The ISM said its purchasing managers index fell to 59.3 in March from 60.8 in February, while economists had expected the index to slip to 60.0.