NEW YORK – The U.S. services sector expanded at a slower pace in November as the non-manufacturing business activity composite index was 52.0 in the month, compared to 52.9 in October, on a seasonally adjusted basis, the Institute for Supply Management reported Monday.
Economists polled by Thomson Reuters had expected a 53.5 level.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
The prices paid index, closely watched for signs of inflation, jumped to 62.5 from 57.1.
The employment index decreased to 48.9 from 53.3.
The business activity/production index rose to 56.2 from 53.8, the new orders index was at 53.0, up from 52.4; backlog of orders climbed to 48.0 from 47.0; new export orders gained to 55.5 from 54.0; inventories soared to 52.5 from 45.5; inventory sentiment grew to 63.0 from 57.5; the supplier deliveries index slid to 50.0 from 52.0; and imports increased to 48.5 from 48.0.
Members' general comments on business in the month included:
“Business activity continues to swing back and forth. Customer traffic remains lower than expected, but discretionary spending is fluctuating, making it difficult to find the pulse of the consumer.” (Arts, Entertainment & Recreation)
“Lending is getting a little better. Competition for good deals is fierce because there remains a very limited number of high-quality borrowers.” (Finance & Insurance)
“Raw materials prices appear to be stabilizing, and in some cases are dropping. Diesel fuels remain elevated and have not dropped.” (Mining)
“We currently see no signs of a turnaround. Customers are nervous about the future of their jobs and incomes. Due to this fact, our sales are down and our need to hire more employees is, too.” (Accommodation & Food Services)
“Business is slowly improving. Outlook for the next few months is good.” (Retail Trade)
“In the face of an extremely tight business climate, prices continue to be sticky. We are not seeing significant price moderation.” (Management of Companies & Support Services)
