U.S. private sector growth eases to seven-month low in April
The latest reading pointed to the weakest rate of expansion since September 2016.
The moderation in private sector growth reflected a loss of momentum in both the service economy (‘flash’ index at 52.5 in April) as well as the manufacturing sector (‘flash’ index at 53.4).
April data also revealed the weakest rise in private sector payroll numbers since February 2010, driven by a softer pace of staff hiring among service providers.
There were signs of a squeeze on operating margins in April, as input price inflation reached its strongest since June 2015.
At the same time, prices charged by U.S.
private sector firms increased only marginally and at the slowest pace since November 2016.
The composite index is based on original survey data from the Markit U.S. Services PMI and the Markit U.S. Manufacturing PMI.
Growth of business activity across the service sector continued to moderate from the 14-month peak seen in January.
This was highlighted by a fall in the seasonally adjusted Markit Flash U.S.
Services PMI Business Activity Index1 to 52.5, from 52.8 in March.
The latest reading was above the 50.0 no-change value, but signalled a weaker rate of business activity growth than the post-crisis average (55.3).
New business growth remained moderate in April, although the latest upturn was stronger than the 12- month low seen in March.
April’s survey suggested a lack of pressure on operating capacity, as backlogs of work declined for the third month running.
Subdued demand growth and lower volumes of incomplete work acted as a brake on staff hiring in April.
The latest rise in employment numbers was only marginal and the weakest since July 2010.
Service providers nonetheless remain upbeat about their prospects for growth over the next 12 months.
The degree of positive sentiment picked up to its strongest for three months in April. ■