US service sector growth disappoints as dollar dips

THE US dollar fell sharply in morning trading yesterday after the ISM non-manufacturing report showed the pace of growth in the services sector unexpectedly eased in April.

The index dropped sharply to 52.8 per cent in April, 4.5 percentage points lower than the 57.3 per cent registered in March. Figures above 50 per cent indicate economic growth.

Future prospects are also grim, with new orders plummeting from 64.1 to 52.7 in a month.

Meanwhile private employers added fewer jobs than expected in April. Private payrolls rose by 179,000 jobs last month, an ADP report found, shy of economists’ expectations for a gain of 198,000.

Earlier in the day the Challenger report showed the number of planned layoffs at US firms fell in April to the lowest monthly amount for the year. Employers announced 36,490 planned job cuts in April, down 12 per cent from 41,528 in March.