The U.S. services sector expanded at a slightly faster pace in January as the non-manufacturing business activity composite index was 56.7 in the month, compared to 56.5 in December, on a seasonally adjusted basis, the Institute for Supply Management reported Wednesday.
Economists polled by Thomson Reuters had expected a 56.4 level.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
The prices paid index dropped to 45.5 from 49.8.
The employment index decreased to 51.6 from 55.7.
The business activity/production index rose to 61.5 from 58.6, the new orders index was at 59.5, up from 59.2; backlog of orders slid to 49.0 from 49.5; new export orders declined to 52.5 from 53.5; inventories increased to 52.5 from 50.0; inventory sentiment gained to 61.5 from 59.0; the supplier deliveries index rose to 54.0 from 52.5; and imports dropped to 46.5 from 50.0.
Members' general comments on business in the month included:
"Business is turning up slightly." (Health Care & Social Assistance)
"Construction demand growing." (Construction)
"The fall of oil commodity pricing is putting a good deal of pressure on our customers (oil company) budgets for 2015." (Mining)
"Mild winter has had a good effect on sales. Overall sales are up 2% from last year. Fuel prices are down which has reduced costs. Government mandates on healthcare and minimum wage are still a concern." (Accommodation & Food Services)
"Start of the year is off to a great start. We remain cautiously optimistic. Lower fuel prices show strong local, regional and national economic activity." (Professional, Scientific & Technical Services)
"Have not seen the [lower] cost of fuel have any affect yet on other prices." (Retail Trade)
"General business activity remains consistent with past months; new projects/products continue to develop." (Wholesale Trade)
