You are here

US service sector activity slows to 6-month low in November

[WASHINGTON] US services industry activity slowed to a six-month low in November amid widespread restrictions on businesses to control surging Covid-19 infections, bolstering views that the economy's recovery from the pandemic recession was running out of steam.

The Institute for Supply Management (ISM) said on Thursday its non-manufacturing activity index fell to a reading 55.9 last month. That as the lowest reading since May when the recovery started and followed 56.6 in October.

The second straight monthly decrease pulled the index further below its 57.3 level in February. A reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of US economic activity. Economists polled by Reuters had forecast the index dipping to 56.0 in November.

The ISM reported on Tuesday that its measure of national manufacturing activity fell in November, with many industries reporting higher rates of absenteeism, short-term shutdowns to sanitise factories and difficulties in returning and hiring workers because of the coronavirus.

The United States is engulfed in a fresh wave of Covid-19 infections, with 4.2 million new cases and more than 35,000 coronavirus-related deaths reported in November, according to a Reuters tally of official data.

Your feedback is important to us

Tell us what you think. Email us at

More than US$3 trillion in government Covid-19 relief, which helped millions of unemployed Americans cover daily expenses and companies keep workers on payrolls, has either expired or will lapse later this month. That has combined with the coronavirus resurgence to slow consumer spending. The stimulus led to record economic growth in the third quarter.

A bipartisan group of lawmakers on Tuesday proposed a new US$908 billion emergency relief package. Senate Majority Leader Mitch McConnell, who has been pushing a US$500 billion approach that Democrats reject, circulated new draft legislation on the same day. Treasury Secretary Steven Mnuchin said on Wednesday President Donald Trump would sign Mr McConnell's proposed package, should Congress approve it.

The ISM survey's measure of new orders for the services industry dropped to a reading of 57.2 in November from 58.8 in October. It has declined for a second straight month. Backlog orders and export orders also decreased, pointing to a further moderation in services industry activity in the near term.

But the survey's index of services industry employment rose to 51.5 from a reading of 50.1 in October.

That suggests the labour marker recovery continued in November, though at a moderate pace. According to a Reuters survey of economists, nonfarm payrolls likely increased by 486,000 jobs last month after rising 638,000 in October.

That would the smallest gain since the jobs recovery started in May. It would leave employment about 9.609 million below its peak in February. Job growth has cooled from a record 4.781 million in June.


BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to