News Summary: US service firms grew at slower pace

AP News
Posted: May 03, 2013 12:43 PM

SERVICE SLOWDOWN: Growth at U.S. service companies slowed in April as companies reported less business activity and couldn't raise their prices. The Institute for Supply Management's index of non-manufacturing activity fell to 53.1 in April from 54.4 in March. Any reading above 50 indicates expansion.

LESS CONSUMER DEMAND: The decline in the index suggests some service companies may be starting to see less consumer demand, in part because of higher Social Security taxes that took effect Jan. 1.

STEEP DROP IN PRICES: April's weakness in was largely because of a steep drop in a measure of prices. Nearly 70 percent of companies surveyed said they didn't change their prices last month, while 10 percent lowered them.