Investing.com – Business activity in the U.S. private sector expanded at its slowest pace in six months in March, dampening optimism over the American economy, according to preliminary data released on Friday.
In a report, market research group Markit said that its flash services purchasing managers’ index (PMI) eased to 52.9 in March, from the prior month’s reading of 53.8. That was a six month low.
Analysts had expected the reading to increase to 54.2.
Services make up approximately 80% of the U.S. economy which makes the data key for interpreting growth.
Markit also said that its flash manufacturing purchasing managers’ index (PMI) fell to 53.4 in March from the prior month’s final reading of 54.2. That was a five month low.
Analysts had expected an increase to 54.8.
The composite PMI, including activity in both sectors, fell to 53.2 from February’s reading of 54.1. That was a six-month low.
On the indices, a reading above 50.0 indicates expansion, below indicates contraction.
IHS Markit chief economist Chris Williamson indicated that the slowdown for a second straight month suggested that the economy is struggling to sustain momentum and that the survey results were consistent with GDP growth of 1.7% for the first three months of 2017, compared to 1.9% in the fourth quarter of 2016.
Following the report, EUR/USD traded at 1.0796 from 1.0799 prior to the release, GBP/USD was at 1.2479 from 1.2482 earlier, while USD/JPY was at 111.23 compared to 111.21 previously.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 99.57, compared to 99.56 ahead of the report.
Meanwhile, U.S. stocks were trading higher after the open. The Dow 30 gained 45 points or 0.22%, the S&P 500 rose 7 points, or 0.28%, while the tech-heavy Nasdaq Composite advanced 34 points or 0.58%.
Elsewhere, in the commodities market, gold futures traded at $1,247.35 a troy ounce, compared to $1,244.25 ahead of the data, while crude oil changed hands at $47.91 compared to $47.83 previously.