Forexpros – Service sector activity in the U.S. fell more-than-expected in March, but expanded for the 27th consecutive month, industry data showed on Wednesday.
In a report, the Institute of Supply Management said its non-manufacturing purchasing manager’s index declined by 1.3 points to 56.0 in March from a reading of 57.3 in February.
Analysts had expected the index to decline by 0.3 points to 57.0 in March.
On the index, a reading above 50.0 indicates the non-manufacturing sector economy is generally expanding, below 50.0 indicates the sector is contracting.
The New Orders Index decreased by 2.4 points to 58.8, while the Employment Index increased by 1.0 point to 56.7, indicating continued growth in employment at a slightly faster rate.
The Prices Index decreased 4.5 points to 63.9, indicating prices increased at a slower rate in March when compared to February.
According to the report, 16 non-manufacturing industries reported growth in March. Respondents’ comments remain mostly optimistic about business conditions. They indicate that increased discretionary spending reflects the increased confidence level of businesses and consumers.
There is continued concern about cost pressures and the instability of fuel prices.
Following the release of the data, the U.S. dollar remained higher against the euro, with EUR/USD slumping 0.76% to hit 1.3134.
Meanwhile, U.S. stock markets held on to sharp losses. The Dow Jones Industrial Average tumbled 0.9%, the S&P 500 index declined 0.85%, while the Nasdaq Composite index dropped 1.05%.
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