US services sector growth slows
Figures released today revealed growth in the US services sector slowed in June and hit its lowest level since February.
However, the vast services sector, which makes up around two-thirds of US economic activity, grew for the sixth consecutive month in June.
The Institute for Supply Management (ISM) said its service index fell in June to 53.8 from 55.4 the previous month and short of analysts expectations of a reading of 55.
However, any reading above 50 indicates growth within the sector.
In the meantime, new orders also fell in the ISM service sector indices, from 57.1 in May to 54.4 last month, suggesting growth may be moderating, while export orders turned negative.
However, according to Charles Lieberman, chief investment officer at Advisors Capital Management LLC in New Jersey, the figures do not suggest a double-dip recession like many are predicting.
The report follows figures released by the Labor Department last week, which revealed the world’s largest economy lost 125,000 jobs last month – primarily due to the loss of temporary Government jobs, which were recruited to help conduct the 2010 census.
However, a fall would traditionally mean a higher unemployment rate, but this dipped from 9.7% in May to 9.5% in June.
According to analysts, the figures add to already weak data for the US economy in recent weeks – suggesting sluggish economic growth.