US service-sector recovery slows in August as pandemic fears weigh on spending - Business Insider

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US service-sector recovery slows in August as pandemic fears weigh on spending

A worker at a restaurant in Louisville, Kentucky, cleans a table at a restaurant after it was allowed to reopen in May.The US services industry slowed its pace of expansion in August as stimulus programs expired and the coronavirus pandemic continued to weigh on spending activity.gauge of the industry dropped to 56.9 last month from 58.1, notching its first decline in four months. A reading above 50 indicates growth, while one below the level signals contraction.

The virus' lasting damage will "constrain the recovery of service activity to a low growth mode," Oxford Economics said in a Thursday note.The US service industry grew at a slower rate in August as government stimulus dried up and consumer spending moderated. The decline was largely driven by a drop in new orders. ISM's New Orders Index sank to 56.8 in August from 67.7. The firm's gauge of production fell 4.8 points through the month to 62.4.

Employment crept higher to expansionary territory in August, gaining 5.8 points to 47.9. ISM's employment and inventories gauges are the only ones still indicating contraction.

 

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