Services in U.S. Expand at Second-Strongest Pace on Record
U.S. service providers expanded in April at the second-fastest pace in data back to 1997, cooling slightly from the prior month as business activity and order growth pulled back from record highs.
The Institute for Supply Management’s services index unexpectedly fell to 62.7 last month from a record 63.7 in March, data showed Wednesday. Readings above 50 signal growth.
While trailing forecasts, the April figure indicates a resumption in the swift rebound for sectors hardest hit by the pandemic-driven downturn. With vaccinations rising and restrictions on capacity and travel easing, U.S. service providers are increasing headcount to meet burgeoning demand.
ISM’s measure of services employment rose to 58.8, the highest since September 2018. The pickup reinforces expectations for another month of strong job growth when the government’s employment report is issued Friday. The median forecast in a Bloomberg survey of economists calls for an almost one million increase in April nonfarm payrolls.
While the ISM’s index of business activity among services fell after reaching a series high in March, some 46% of respondents said it was higher. That matched the second-largest share on record.