The US services and construction sectors grew at a slower rate February, according to survey data released today.
The Institute for Supply Management's non-manufacturing edged down to a score of 53.4 in February from 53.5. Figures above 50 indicate growth with February's figure implying slightly lower growth than January.
While most sectors reported growth, the mining, arts, retail and entertainment industries reported contractions.
The details of the survey showed business had were now cutting jobs, albeit at a very low rate. New orders were rising and business activity was stronger than in January.
Exports bounced back with the index for new export orders scoring 53.5 from 45.5. Import growth was also stronger.
"The big disappointment is the slump in the employment index to a two-year low of 49.7, from 52.1. At first glance that is a concern because it leaves the index consistent with monthly gains in services payrolls of only 50,000 per month. But we’ve seen this happen with the employment index before. In February 2014 it slumped to 47.7, from 56.3, only to rebound to 53.3 in March," said economist Paul Ashworth from Capital Economics.
"Overall, it still appears that first-quarter economic growth will come in at a healthy 2.5 per cent annualised. Given the signs of rising core inflation, that shouldn’t prevent the Fed from beginning to hike interest rates again in June."