-Chris Williamson, Markit Chief Economist
Activity growth in the US services sector slowed in April amid a decline in new business growth, but the pace of employment in the sector quickened to the fastest since last June. Markit's flash reading of services PMI slid to 57.8 in the current month from a final 59.2 in March, the highest level since August. Economists, however, had expected the gauge to fall to 58.2. On index, any reading above 50 points to expansion in the sector's business activity. Markit's reading of employment at service companies, meanwhile, rose to a the highest level in 10 months of 55.4 in April 54.0 a month earlier. Moreover, service sector companies are generally optimistic about the economy, with positive sentiment at its highest level since January. The services index's new business sub-component retreated slightly from the previous month, when it had reached the highest level since September.
Meanwhile, Markit's composite PMI, a weighted average of manufacturing and services indexes, declined to 57.4, down from 59.2 in March. Last week Markit said growth in the manufacturing sector's activity slowed in the current month by the most in six months, but remained firmly in expansion territory. The Markit data suggest annual gross domestic product growth could accelerate to around 3% in the three months through June from an anaemic first-quarter pace of around 1.0%
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