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US services sector growth dips in July, still strong: Markit

A prep cook trims a piece of steak at Aveline restaurant in San Francisco.
Noah Berger | Bloomberg | Getty Images
A prep cook trims a piece of steak at Aveline restaurant in San Francisco.

The pace of growth in the U.S. services sector dipped in July compared to the previous month, but still posted its second-highest reading in 4-1/2 years, a survey showed on Tuesday.

Financial data firm Markit said its final services Purchasing Managers Index hit 60.8 in July, down from the preliminary reading of 61.0, which was also the reading for June.

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The 61.0 print for June was the highest final reading for any month since the survey began in October 2009. A reading above 50 signals expansion in economic activity.

"The services sector grew at a rapid pace, just slightly weaker than June's post-recession high, accompanied by a surge in factory production," said Chris Williamson, chief economist at Markit.

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"However, there are signs that growth could cool in coming months. The surveys indicate that the rate of job creation has waned, as have inflows of new business."

Steve Debenport | iStock | 360 | Getty Images

The new business component slipped last month to 57.3, compared to the preliminary reading of 57.6 and June's final 60.8.

Confidence about the year-ahead business outlook in the services sector slipped to the lowest since November 2012.

Markit's final composite PMI, a weighted average of its manufacturing and services indexes, hit 60.6 in July, also the second-highest final reading on record, versus 61.0 in June and a preliminary 60.9.

By Reuters

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