Service Industries in U.S. Grow at Slowest Pace in Two Years
Source: Bloomberg
By Sho Chandra
February 3, 2016 — 10:00 AM EST
Updated on February 3, 2016 — 11:09 AM EST
Service industries expanded in January at the slowest pace in nearly two years, raising the risk that persistent weakness in manufacturing is starting to creep into the rest of the U.S. economy.
The Institute for Supply Management’s non-manufacturing index fell last month to 53.5, the lowest since February 2014, from 55.8, the Tempe, Arizona-based group’s report showed on Wednesday. Readings above 50 signal expansion. The result was less than the 55.1 median forecast in a Bloomberg survey.
The industries that account for about 90 percent of the economy may be adjusting expectations after consumers tempered spending and businesses cut back on investment in the fourth quarter. While service providers can be more insulated than their factory counterparts from sluggishness overseas and a stronger dollar, the January retreat reflected a sudden shift lower in sentiment about business activity.
“Manufacturing weakness seems to be spreading to the services side of the economy,” said Thomas Costerg, a senior U.S. economist at Standard Chartered Bank in New York. “There’s definitely no decoupling here. It’s a shaky outlook.”
Read more: http://www.bloomberg.com/news/articles/2016-02-03/service-industries-in-u-s-expand-at-slowest-pace-since-2014
