U.S. Service Sector Growth Slows Modestly In November
A slight pullback in the rate of growth in U.S. service sector activity continued in the month of November, according to a report released by the Institute for Supply Management on Thursday.
The ISM said its services PMI edged down to 55.9 in November after dipping to 56.6 in October, although a reading above 50 still indicates growth. Economists had expected the index to slip to 56.0.
“Respondents’ comments are mixed about business conditions and the economy,” said Anthony Nieves, Chair of the ISM Services Business Survey Committee.
He added, “Most companies are cautious as they navigate operations amid the pandemic and the aftermath of the U.S. presidential election.”
The modest decrease by the headline index came as the business activity index slid to 58.0 in November from 61.2 in October. The new orders index also fell to 57.2 from 58.8.
On the other hand, the ISM said the employment index rose to 51.5 in November from 50.1 in October, indicating the third consecutive month of job growth in the service sector.
The report said the prices index also climbed to 66.1 in November in 63.9 in October, suggesting a faster rate of price growth compared to the previous month.
“Looking ahead, we expect the services recovery to continue cooling in the months to come,” Oren Klachkin, Lead U.S. Economist at Oxford Economics.
He added, “While the recent string of positive vaccine news is encouraging, services, particularly consumer-facing firms, will not be on a stable footing until broad swathes of the population are immunized and the health crisis is fully over.”
The ISM released a separate report on Tuesday showing the pace of growth in U.S. manufacturing activity slowed by more than expected in the month of November.
The manufacturing PMI dropped to 57.5 in November from 59.3 in October, while economists had expected the index to dip to 58.0.