Service sector chilled in February

Feb. 24, 2014 at 11:10 AM
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NEW YORK, Feb. 24 (UPI) -- The U.S. service sector's output slowed in February, but new orders growth remained robust, Markit Economics reported Monday.

A flash estimate of the month's performance shows the service sector reached the weakest point it has been in four months, but Markit said weather disruptions were the primary cause of the slowdown. New orders levels indicate that the sector remains in recovery, despite the stall that was prompted by freezing temperatures in January and February.

Markit said the headline purchasing managers index slipped from a four-month high of 56.7 in January to 52.7 in February.

The new orders index remained strong at 56.2, a slight drop from 56.4 in January.

The employment index slipped, but held above 50, which is the break even point between growth and contraction. The employment index fell from 54.1 to 52.

"The unusually severe winter weather undoubtedly looks to have taken its toll on the economy in the

first quarter," said Markit Chief Economist Chris Williamson in a statement.

"Over the first two months of the year, the manufacturing and services PMI surveys are signalling an annualised growth rate of just 1.6 percent, which represents a halving of growth compared to the 3.2 percent pace seen in the fourth quarter," Williamson said.

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