U.S. service sector decelerates in April
The services industry of the United States posted a mild contraction in April. The deceleration could be attributed to shortages of inputs as the country’s large stimulus package and improving public environment boosted demand.
The Institute for Supply Management’s non-manufacturing activity index was read at 62.7 in April. The reading placed lower than the 63.7 record seen in March. While there was a drop, the index remained above the 50 threshold that separates growth from decline.
Congestions in the sector’s supply chain restricted factory activity last month. But U.S. President Joe Biden’s massive fiscal stimulus and vaccination programs boosted demand. In addition to this, Federal Reserve Chair Jerome Powell said that bottlenecks would be resolved by workers and businesses’ adaptability.