NEW YORK (REUTERS) - The U.S. services sector expanded at a slower pace in August than July as new business growth softened, an industry report showed on Tuesday.
Financial firm Markit said its preliminary or "flash" reading of its Purchasing Managers Index for the services sector slipped to 55.2 in August from the final 55.7 reading in July, below the 56 level expected by economists in a Reuters survey.
A reading over 50 signals expansion in economic activity.
A subindex measuring new business at service companies declined to 54.8, its lowest level since January, from the final reading of 57.4 in July, which was the highest reading since April. The employment component rose at the same pace as the prior month.
"August data signals a renewed slowdown in U.S. service sector growth," said Tim Moore, senior economist at Markit. "Moreover, service providers' new business volumes expanded at the slowest pace since January, suggesting that underlying momentum within the U.S. economy had shifted down a gear even before the recent global market turmoil and escalating worries about China's growth outlook gathered on the horizon."
Markit's "flash" composite PMI, a weighted average of its manufacturing and services indexes, was 55.0, down slightly than in July.