US services sector slows slightly in April after record high
WASHINGTON (AP) — Activity in the U.S. services sector, where most Americans work, slowed slightly in April after hitting an all-time high in March.
The Institute for Supply Management said its monthly survey of service industries showed a drop to a still high reading of 62.7, 1 percentage point lower than the record high of 63.7 set in March.
Any reading above 50 indicates the sector is expanding. The April level marks the 11th straight month of expansion in the services sector after a two-month contraction in April and May last year when the country was struggling with widespread shutdowns caused by the coronavirus pandemic.
The reading on service industries followed an ISM report Monday that activity in manufacturing also slowed in April to a level of 60.7. The manufacturing slowdown was attributed to widespread supply chain shortages.
The services index showed slowdowns in new orders and business activity while employment rose. A total of 17 service industries reported growth in April with the category that includes agriculture the only industry reporting a decline last month.
Just as in manufacturing, many businesses cited troubles in supply chains.
“Expansion in services was ongoing in April even as supply chain disruptions were a headwind,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “The outlook for the services sector remains positive, aided by a broader resumption of activity” in the overall economy.