Supply news was also good. After rising to 52.4 in January, supplier deliveries fell to 48.9. A reading under 50 suggests speedier delivery. This measure dropped, lowering services PMI.
The survey's services sector employment measure fell to 48.0 from 50.5 in January. Worker shortages and layoffs undoubtedly lowered employment.
The ISM Services Business Survey Committee chair, Anthony Nieves, said businesses said "we have lost employees due to normal attrition and are having issues backfilling these positions" and "currently holding at post-peak employment levels, however, planning to bring in new associates as spring approaches."
Utility providers said "labor continues to be in highest demand," and "finding qualified and available crews and administrative staff is still difficult." Companies that manage and assist companies indicated "employers remain cautious about hiring direct employees and are considering utilizing contract labor to cover project."
After February's factory employment decrease, that suggests a significant slowing in job creation. However, ISM services and manufacturing employment metrics have not reliably predicted nonfarm payroll employment.
However, a Conference Board survey on Tuesday found consumers less optimistic about the work market.
A Reuters survey of economists expects the government to publish on Friday that nonfarm payrolls rose 200,000 in February following 353,000 in January. The unemployment rate is expected steady at 3.7%.
"The ISMs have not been reliable payroll bellwethers since the pandemic," noted New York FHN Financial economic expert Mark Streiber.
Follow for more updates