Source: Wall Street News

On Friday, data released by ISM showed that the US service sector unexpectedly contracted in April, for the first time since 2022. Among them, business activity indicators fell to a four-year low, and investment cost indicators rose.

The US ISM service industry index fell to 49.4 in April, a new low since December 2022, falling far short of expectations of 52, lower than the expectations of all economists surveyed by the media. The value before March was 51.4. 50 is a watershed moment between prosperity and withering.

In fact, the previous March data showed some signs of weakness. The US ISM service sector PMI remained above the 50 mark for more than a year before April, but the March reading was already lower than the expectations of the vast majority of economists surveyed by the media.

In terms of important sub-indices:

The new orders sub-index fell to 52.2, compared to the previous value of 54.4.

The business activity index plummeted 6.5 points to 50.9 in April, the lowest level since May 2020, when the US economy was struggling due to COVID-related shutdowns. This sub-index corresponds to its factory output sub-index in ISM manufacturing data. The indicator has been rising steadily for the past six months. If the data continues to weaken over the next few months, it may raise concerns about a wider slowdown in the US economy, as the service sector is the largest component of the country's economy.

The employment sub-index fell to 45.9, compared with the previous value of 48.5.

Anthony Nieves, chairman of the ISM Services Business Research Committee, said in a statement:

Respondents said that overall business is generally slowing down, and the exact pace varies from company to company and industry. Most respondents said that inflation and geopolitical issues remain a concern.

edit/lambor