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US services sector growth slows in May: Markit
[NEW YORK] US services sector expansion eased for a second straight month in May, pressured by a drop in new business growth that offset a modest acceleration in hiring, an industry report showed on Wednesday.
Financial firm Markit said its final reading of its Purchasing Managers Index for the services sector slipped to 56.2 in May, a level that was below both the preliminary reading of 56.4 and April's reading of 57.4.
A reading over 50 signals expansion in economic activity.
Markit's May reading of new business at service companies fell to 55.7 from 57.7 in April. The preliminary reading was 55.8.
The services index's employment component rose modestly, though that was enough to take it to its highest level since June 2014.
Markit's composite PMI, a weighted average of its manufacturing and services indexes, fell to 56.0 in May from 57.0 in April. The preliminary reading was 56.1. Earlier this week, Markit's final read on US manufacturing activity showed slightly slower growth in May.
"Slowing service sector growth adds to signs that the US economy has lost some momentum after an initial bounce-back from weather-related weakness at the start of the year," Markit Chief Economist Chris Williamson said in a statement.
"The softness of the data raises big question marks for policymakers over the strength of the rebound and whether the economy is losing momentum as it heads into the summer."