US services sector growth slows in February, price pressures jump

The Institute for Supply Management's services sector Purchasing Managers' Index retreated from a January reading of 58.7 to 55.3, whereas economists had forecast that it would remain unchanged.

A sub-index tracking firms' new orders suffered the biggest drop, falling by 9.9 points from a month before to reach 51.9.

The breakeven level for the headline PMI and all subindices is 50 points.

Another key sub-index, linked to employment meanwhile dipped, by 2.5 points to 52.7, while that for prices paid shot higher by 7.6 points to 71.8.

Comments from purhasing managers in the various sectors were mixed, although several noted optimism or increased confidence given recent declines in the number of cases of Covid-19 and vaccine rollouts.

Some, such as from the Accomodation and Food Services sector, also noted proposed price increases from suppliers "that are above and beyond normal expectations, causing significant concern."

Commodity price increases were said to be the reason behind the increased price offers.