Investing.com - Service sector activity in the U.S. grew at a slower rate than expected in March, underlining concerns over the economic outlook, industry data showed on Thursday.
In a report, the Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 53.1 last month from a reading of 51.6 in February. Analysts had expected the index to increase to 53.5 in March.
The Non-Manufacturing Business Activity Index decreased to 53.4, which is 1.2 points lower than the reading of 54.6 reported in February.
The New Orders Index registered 53.4, 2.1 points higher than the reading of 51.3 registered in February.
The Employment Index increased 6.1 points to 53.6 from the February reading of 47.5 and indicates substantial growth after one month of contraction.
On the index, a reading above 50.0 indicates the non-manufacturing sector economy is generally expanding, below 50.0 indicates the sector is contracting.
Despite the effects of weather on many of the respective businesses, the majority of respondents indicate that business conditions are improving. The respondents also project better business activity and economic conditions as weather conditions continue to improve.
Following the release of the data, the U.S. dollar held on to gains against the euro, with EUR/USD shedding 0.34% to trade at 1.3719.
Meanwhile, U.S. stock markets were higher after the open. The Dow Jones Composite rose 0.1%, the S&P 500 inched up 0.1%, while the Nasdaq 100 tacked on 0.2%.