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US service sector growth sluggish, labor market slackens: Markit

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Growth in the U.S. services sector slowed slightly in April, an industry report showed on Monday, and the pace of employment slackened for a fourth straight month to its slowest in more than a year.

Financial data firm Markit said its final service sector purchasing managers' index fell to 55.0 in April from 55.3 in March, though the figure was slightly above the preliminary read of 54.2 released late last month. A reading above 50 points to growth.

"The final services PMI came in higher than the flash reading and signals only a very minor slowing in the rate of expansion compared with March,'' said Chris Williamson, chief economist at Markit.

Employers in the service sector, which accounts for about three-quarters of the U.S. labor market, continued to add employees, but at the slowest rate since March 2013. The final employment index came in at 51.2 in April, compared with 51.8 in March.

The Markit figures, however, were at odds with the U.S. Labor Department's April employment report, released on Friday. The government data showed service-sector hiring expanded last month by the most in 11 months, with 220,000 private-sector services jobs added.

Markit said new business growth for the services sector picked up from March, when new business activity was its slowest since September 2012 on a final basis.

Markit's final composite PMI, a weighted average of manufacturing and services indexes, eased to 55.6 in April from 55.7 in March. The preliminary reading was 54.9.

The employment component of the composite index was 51.7 compared with 52.2 in March, and was also the lowest since March 2013.

--By Reuters

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