Growth in the US services sector accelerated in March, an industry report showed today, though the pace of employment slackened for a third straight month to its slowest in a year.
Financial data firm Markit said its final service sector purchasing managers' index rose to 55.3 in March from 53.3 in February, though the figure was slightly below the preliminary read of 55.5 released last week.
Employers in the service sector, which accounts for about three-quarters of the US labour market, continued to add employees, but at the slowest rate since March 2013. The final employment index came in at 51.8 in March, compared with 51.9 in February. March marks the third straight month of slowing in the employment subindex.
"Hiring remained disappointingly subdued, suggesting firms are reluctant to expand capacity until they see firm evidence of stronger demand feeding through to their businesses," said Chris Williamson, chief economist at Markit.
New business growth for the services sector was at its slowest since September 2012 on a final basis.
Williamson added that the survey was at a level historically consistent with private sector payrolls growing by 130,000 per month.
The Labor Department will release the highly anticipated March unemployment report on Friday. A Reuters poll shows economists expect a gain of 200,000 in nonfarm payrolls and 195,000 in private payrolls.
Markit’s final composite PMI, a weighted average of manufacturing and services indexes, rose to 55.7 in March from 54.1 in February. The preliminary reading was 55.8.
The employment component of the composite index was 52.2, compared with 52.3 in February, and was also the lowest since March 2013. (Reuters)
