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US preliminary services PMI signals about low activity

The US services sector demonstrated in May a decrease of activity. However activity in restaurants and retail sales supported a moderate economic growth in the country, notes Markit in a report released on Wednesday.


The first services PMI in May hit 51.2, down by 1.6 bp from final April assessment. Experts expected PMI to remain unchanged.


Organisations of services sector demonstrated a growth of activity in this month. Some organisations stated that reduction of capital investments and unwillingness of clients to approve new projects led to fall of demand.


Services employment continued to grow but slightly slower on the background of low optimism in companies. According to data released by Markit, number of organisations which expect a growth of activity this year was the lowest since October 2009. There some signs that consumer confidence fell on the background of elections and concerns over economic outlooks.


The US services still preserves its main meaning for economic growth. Activity in this sector levels negative influence from slow production that cannot resist consequences from reduction of global demand and strengthening of the US dollar.