Survey: US services firms register slowest growth since 2010
WASHINGTON — U.S. services companies grew last month at the slowest pace in more than six years, a private survey finds.
The Institute for Supply Management said Tuesday that its services index fell to 51.4 last month from 55.5 in July. The August reading was the lowest since February 2010, and last month’s 4.1-point drop was the biggest since November 2008 when the U.S. economy was in a recession. Still, anything above 50 signals growth, and services firms have now expanded for 79 straight months.
New orders and hiring grew more slowly in August. Export orders fell. Eleven services industries reported growth in August; seven, including retailing, contracted.
Stephen Stanley, chief economist at Amherst Pierpont Securities, said the report is the latest that shows the economy was “noticeably weaker than expected” in August. He says the ISM services reading gives the Federal Reserve another reason to delay an interest rate increase at its September meeting.