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Growth in the US services sector lost some of its momentum last month, with the pace of expansion at its slowest in five months.

A final reading of the services purchasing managers’ index (PMI), produced by IHS Markit, came in at 53.8 for February, down from the 55.6 recorded the prior month.

While the figure is still well ahead of the crucial 50 mark that divides contraction and growth, it was weaker than the 54 reading that analysts were expecting.

“Taken together, the PMI survey readings for the first two months of the year suggest the economy is growing in the first quarter at a respectable annualised rate approaching 2.5%,” said Chris Williamson, chief business economist at IHS Markit.

“The burning question is whether the February slowdown merely represents some pay-back after a strong start to the year for US businesses, or whether it’s the start of a more entrenched slowdown.”

The latest snapshot of the services sector comes on the heels of a spate of economic data this week showing strong growth in the US manufacturing sector and continued resilience in the labour market.

The market is widely expecting the Federal Reserve to raise interest rates at its next meeting this month, with Fed fund futures pricing in a 90 per cent of a rise.

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