The all important service sector of the US economy grew slower in April than March, the closely-watch ISM index showed today.
The index was another sign that the US economy hit a rough patch last month.
The Institute for Supply Management's services index fell to 53.5 from 56, showing the services sector continues to expand, but only sluggishly.
Companies surveyed told the ISM that business was better than last year but that expansion had slowed, with some citing the effect of higher oil prices.
"Respondents' comments affirm the slowing rate of growth. In addition, they remain concerned about rising fuel costs and the impact on shipping, transportation and petroleum-based product costs," the ISM said in a statement.
The report contrasted with a pickup in growth last month in the much smaller manufacturing sector, as shown by ISM survey data reported on Tuesday. The Obama administration has pushed for a pickup in the manufacturing sector to help get the economy up to a solid, sustainable pace of growth.
Meanwhile, new claims for US unemployment benefits dropped more quickly than expected last week, but remained painfully high, the Labor Department said today.
New jobless claims stood at 365,000 for the week to April 28, compared to a revised 392,000 level the previous week. Expectations had been for a more modest drop to around 375,000.
Coming on the back of poor business payrolls data for April, the figures are unlikely to stoke much optimism ahead of Friday's official unemployment statistics.
