Bloomberg A worker uses a pipette in a lab at the Pfizer Inc. research and development facility in Cambridge, Massachusetts.
The numbers: The Institute for Supply Management’s non-manufacturing index slowed to a reading of 55.5% in April from 56.1% in March, the worst reading since Aug. 2017.
Economists polled by MarketWatch expected a 57.5% reading.
A related gauge from IHS Markit, its U.S. services PMI, fell to 53 from 55.3 in March, which was that series worst reading since March 2017.
What happened: Components for new orders, employment, prices and backlogs were among that declined in April. The decline in the employment gauge contrasts with the acceleration in services hiring reported by the Labor Department for April.
The production gauge did accelerate, however, as did components for inventories and new export orders.
The big picture: The slowing gauges suggest that the U.S. economy may be heading for rockier times even with a strong jobs market.
What they’re saying: “We had a general slowing of business activity beginning in February. We initially believed that February’s slowness was primarily weather related, but the slowness continued into March and now April,” said one purchasing manager in wholesale trade.
“We have experienced several cancellations that have significantly impacted the month’s revenue. [The cancellations] appear to be attributed to an international business situation — which was the source for the potential revenue,” said a manager in the professional, scientific & technical services field.
Market reaction: U.S. stocks DJIA, +0.29% were higher but off their best gains of the day after the ISM report.