The Markit US preliminary PMI manufacturing index declined to 52.8 for April from 53.3 in March. This was below expectations of an increase to 53.5 and the lowest reading for seven months.
The services-sector index declined to 52.5 from 52.8, also at a 7-month low and contrary to expectations of a small increase for the month.
The composite output index declined to 52.7 from 53.0, also the weakest reading for 7 months.
Within the manufacturing sector, there was a slowdown in output and orders growth and a dip in inventory accumulation which will tend to curb near-term activity.
There was, however, a rebound in job creation for the month from seven-month lows in March. The increase in input costs was the strongest since December 2013, primarily due to higher commodity prices, while there was the strongest increase in output prices for 30 months.
Within services, there was a slight strengthening in new business growth, although order backlogs declined for the third successive month.
Employment was a significant feature with the slowest increase in jobs since July 2010 which will create fresh doubts over jobs growth. Costs increased at the fastest rate for 5 months, but the increase in prices was the slowest for five months.
There has been evidence of a slowdown within regional manufacturing surveys, although this has generally been from a very high level with the indices still showing solid growth in historic terms. Although the PMI data recorded a slowdown, the data suggests a solid expansion in manufacturing.
There will be greater doubts surrounding the services sector and the data also indicates a significant squeeze on margins.
The US data is also in significant contrast to further strength in the Eurozone PMI data released on Friday.
There was little market reaction with USD/JPY holding above 109.00, although Treasury futures ticked slightly higher with 10-year yields down to 2.22%.
US PMI Composite Index