(Reuters) – The pace of expansion in the U.S. services sector eased from a seven-month high in April on a dip in new business growth, but hiring in the sector accelerated to its highest since June, an industry report showed on Tuesday.
Financial firm Markit said its final reading of its Purchasing Managers Index for the services sector slipped to 57.4 in April, a level that was down from both the preliminary April read of 57.8, as well as the final March read of 59.2. March’s level was the highest since August.
A reading over 50 signals expansion in economic activity.
Markit’s April reading of employment at services companies, meanwhile, rose to a 10-month high of 55.0 from March’s 54.0. However, this was below the preliminary reading of 55.4.
The services index’s new business component pulled back from the month before, when it had notched its highest level since September.
Markit’s composite PMI, a weighted average of its manufacturing and services indexes, fell to 57.0 from 59.2 in March. The preliminary reading was 57.4. Last week, Markit’s final read on U.S. manufacturing activity showed slower growth in April.
“Robust service sector growth adds to evidence that the economy is far from stalling, as indicated by the GDP numbers seen at the start of the year, supporting the (U.S. Federal Reserve’s) view of the economy growing at a ‘moderate’ rate,” Markit Chief Economist Chris Williamson said in a statement.
The services sector “points to the economy growing at an annualized rate of 3 percent in the second quarter, representing a nice rebound from the first quarter’s soft-patch.”