US services PMI
The index stood at 53.8 in February 2017, compared to 55.6 in January. The value was slightly lower than the market’s earlier expectation of 53.9.
The US services PMI includes the performances of various services industries such as computer and IT (information technology) services, hotels and restaurants, transportation and communication, and financial intermediaries.
Let’s look at some of the key influencing the US services PMI:
- Production volumes showed weak improvement in February 2017.
- New order and export order growth improved more slowly during February compared to January.
- Payroll growth also remained subdued in February.
Services are an important component of US GDP. The contribution of the services industry to US GDP has gradually been rising. In the recent GDP figures, we can see that consumer spending has contributed significantly to GDP, and the service sector has contributed more to GDP. In fact, it’s one of the major backbones of the economy (IWM) (IWF).
The weak improvement in the US services PMI indicates that business conditions weakened in February 2017. Slower domestic demand and international demand mainly affected the performance of the service sector in the month.
In the next part of this series, we’ll analyze the performance of the Germany services PMI in February 2017.