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US service sector growth slightly faster in January

[WASHINGTON] The US economy's service sector picked up pace marginally in January over December, the Institute for Supply Management reported Wednesday.

While most aspects of business turned higher, the ISM purchasing managers index showed, respondents also suggested that the sharp fall in gasoline prices was only having a modest impact so far on the economy.

The ISM's services PMI rose to 56.7 from 56.5 in December. A number above 50 denotes expansion.

There was a strong gain in overall business activity, but new orders were only growing slightly faster, employment gains were almost flat, and prices fell faster than they had the previous month - though that in part represented the gasoline price decline.

A respondent from the hotels and restaurants industry said the mild winter and lower fuel prices had "a good effect on sales."

One person from the professional, scientific and technical services sector said the first month of the year was good, and that "we remain cautiously optimistic."

Retail, wholesale and construction industry respondents also reported modest rises in activity.

The bottom line of the report, said economist Chris Low of FTN Financial, is that the Us economy "downshifted in the fourth quarter and may slow further in the early months of 2015 before reaccelerating later this year."