S&P Global Services PMI: Slower Growth in April

The April U.S. services purchasing managers' index (PMI) conducted by S&P Global came in at 51.3, just above the 50.9 forecast. The latest reading keeps the index in expansion territory for the 15th straight month.

From the latest press release, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:

"Service sector growth slowed in April to point to a sluggish start to the second quarter for the US economy. Alongside a concomitant cooling in the rate of growth
of manufacturing output, the weaker service sector performance means overall business activity grew in April at the slowest rate seen so far this year. At current levels, the PMI indicates that GDP is expanding at a modest annualized rate of approximately 1.5% so far in the second quarter.

"Demand has weakened, as signaled by the first fall in new orders for goods and services for six months, in part a reflection of both businesses and households adjusting to higher costs and the prospect of higher for longer interest rates. Business optimism has likewise cooled, dropping to the lowest since November, and companies are taking a more cautious approach to staffing levels.

"From an inflation perspective, the April survey brought some good news in that prices charged for services rose at a much reduced rate, registering one of the smallest increases = seen over the past four years as greater competition and lower wage growth were reported to have taken some of the heat out of price setting."

Here is a snapshot of the series since mid-2012.

S&P Global Services PMI