The Markit Flash U.S. Services Purchasing Managers' Index (PMI) dipped nearly 2% to 54.2 for April, according to a Markit report (link opens as PDF) released today.
An above-50 reading denotes general growth, while below 50 signals contraction. The "flash" estimate is typically based on approximately 85% to 90% of total PMI survey responses each month and is designed to provide an accurate advance indication of the final PMI data.
While April's report still clocked in within growth territory, this month marks the second-slowest since last October, and is significantly below Q1 2014's average 55.1 reading. Analysts were disappointed by the news, have expected the index to actually increase 0.7 points to 56.2.
Diving deeper into components, things don't look much better. While new business added on 0.6 points to hit 53.6, employment edged closer to stagnation, down 0.8 points to 51.0. Outstanding business also kept up its contraction, dipping an additional 0.3 points to 48.0.
"The PMI surveys indicate that the US economy is slowing in the second quarter, in terms of both economic growth and job creation," said Markit Chief Economist Chris Williamson in a statement today. "With the exceptions of the government shutdown last October and the weather-related disruptions in February, the rate of economic growth signaled by the flash services and manufacturing PMIs in April was the weakest since May of last year."
Williamson noted that April isn't likely to be an outlier, either. Looking ahead, Williamson noted "worrying signs" exist for the future of the services sector. Not only are firms less optimistic about the year ahead, but outstanding business is shrinking at its fastest rate since August 2013.