NEW YORK – The U.S. services sector expanded at a slower pace in April as the non-manufacturing business activity composite index was 53.5 in the month, compared to 56.0 in March, on a seasonally adjusted basis, the Institute for Supply Management reported Thursday.
Economists polled by Thomson Reuters had expected a 55.5 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, slid to 53.6 from 63.9.
The employment index decreased to 54.2 from 56.7.
The business activity/production index fell to 54.6 from 58.9, the new orders index was at 53.5, off from 58.8; backlog of orders gained to 53.0 from 49.5; new export orders rose to 58.0 from 52.5; inventories held at 54.0; inventory sentiment gained to 61.0 from 58.5; the supplier deliveries index increased 51.5 from 49.5; and imports climbed to 56.5 from 56.0.
Members' general comments on business in the month included:
"Sales have improved slightly, yet still lag behind pre-recession highs. The hiring freeze has been lifted, but open positions are still being vetted for need, timing of the fill, and so forth." (Public Administration)
"Business conditions have improved in March and April 2012. We have received more job inquiries and job awards in this period. The increase is about 15 percent." (Professional, Scientific & Technical Services)
"Current conditions compared to prior year are good. Fuel and food continue to be a challenge." (Arts, Entertainment & Recreation)
"Business is slowing — and projections for the rest of the year are being lowered." (Professional, Scientific & Technical Services)
"Business is still ahead of last year, but has leveled off a little." (Wholesale Trade)
"High price of petroleum/oil driving up costs for all market areas." (Transportation & Warehousing)