US services sector slows in April on cooling employment, orders

WASHINGTON: US services industries slowed slightly in April as employment shortages continue to plague companies and as new orders cooled, according to an industry survey released Friday.

While the survey showed the dominant sector of the US economy continues to grow overall, there are some troubling signs, including for companies connected to the global economy.

The services index dipped to 55.5 percent from 56.1 percent, according to the Institute for Supply Management non-manufacturing survey.

Any reading above 50 indicates growth, but economists had been expecting a rebound from the sharp decline in March and the result in April was the slowest of the past 12 months.

The index for business activity jumped 2.1 points, but new orders fell nearly a point and employment dropped 2.2 points, according to the survey.

"Respondents are still mostly optimistic about overall business conditions, but concerns remain about employment resources," Anthony Nieves, chair of ISM's survey committee for the non-manufacturing sector, said in a statement.

One company surveyed commented that "We initially believed that February's slowness was primarily weather related, but the slowness continued into March and now April."

Another complained about order cancellations that "appear to be attributed to an international business situation."

But with unemployment at a nearly 50-year low, firms nationwide continue to lament that they struggle to fill open positions.