The U.S. services sector expanded in April as the non-manufacturing business activity composite index was 57.5 in the month, compared to 55.2 in March, on a seasonally adjusted basis, the Institute for Supply Management reported Wednesday.

An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.

Economists polled by Thomson Reuters had expected a 56.5 level.

The prices paid index rose to 57.6 from 53.5.

The employment index dipped to 51.4 from 51.6.

The business activity/production index grew to 62.4 from 58.9, the new orders index was at 63.2, up from 58.9; backlog of orders climbed to 53.5 from 53.0; new export orders increased to 65.5 from 62.5; inventories gained to 52.5 from 48.5; inventory sentiment fell to 60.0 from 65.0; the supplier deliveries index grew to 53.0 from 51.5; and imports decreased to 53.0 from 56.5.

Members' general comments on business in the month included:

Business level increasing. More project inquiries are being received.” (Construction)

“Beginning of Q2, business is profitable, maybe a bit slower than anticipated. Opportunity still positive.” (Finance & Insurance)

“Stable activity. Waiting on health care reform and its impact on our organization.” (Health Care & Social Assistance)

“Ongoing rain in Northern California is degrading the quality and increasing the prices of some vegetables, such as iceberg lettuce, broccoli, napa cabbage, and some varieties of romaine.” (Accommodation & Food Services)

“[Overall] positive outlook for Q2, Q3, and Q4 [in] 2017.” (Retail Trade)

“Optimistic business outlook, but cautious in light of [the] geopolitical instability with North Korea.” (Management of Companies & Support Services)

“First three months of 2017, sales have exceeded each of [the first] three months of 2016.” (Wholesale Trade)

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