IHS Markit’s US services purchasing managers’ index (PMI) fell to 53.8, but the indicator still signals healthy expansion of output in the world’s largest economy – any figure below 50 denotes contraction. The figure was down from January’s 14-month high of 55.6 and below the long-run series average of 55.3. However, activity was bolstered by new contract wins and the launch of new products. Rates of expansion in activity, new work and employment eased in February, but the expansion of new work was enough to push service providers to take on new staff. Despite optimism being the weakest since September 2016, the index was still in positive territory by a comfortable margin. Improving demand, new products, innovation, business expansions and the end of the election cycle were all mentioned as factors expected to drive activity growth, Markit’s report said. Taken together with January’s indicator, the PMI readings suggest the US economy is growing at a respectable annualised rate in the first quarter, approaching 2.5 per cent, said Chris Williamson, chief business economist at IHS Markit.