Economic activity in the US services sector expanded in February but at a slightly slower pace than January, according to the Institute of Supply Management’s Services PMI report. The Services PMI fell to a reading of 55.1% in February from 55.2% in January. The report was released today and is based on data compiled from purchasing and supply executives across the US.
February’s reading indicates the economy as a whole is growing for the second consecutive month after one month of contraction in December. Readings above 49.9% in the Services PMI over time generally indicate an expansion of the overall economy.
“The Services PMI, by being above 50% for a second month after a single month of contraction and a prior 30-month period of expansion, continues to indicate sustained growth for the sector,” said Anthony Nieves, chair of the ISM’s Services Business Survey Committee.
“Business Survey Committee respondents indicated that they are mostly positive about business conditions,” Nieves said. “Suppliers continue to improve their capacity and logistics, as evidenced by faster deliveries. The employment picture has improved for some industries, despite the tight labor market. Several industries reported continued downsizing.”
Employment was a bright spot, as the employment measure of the index rose in February to a reading of 54% after an unchanged reading of 50% in January.
Comments from survey respondents in the report include “Increase in applications resulting in more new hires” and “Level of employment higher to backfill positions in support of workloads.”