Feb services PMI falls to 6-month low as inflation hits demand; jobs rise

Services, the dominating sector of the economy, contracted to a six-month low in February, as new work orders suffered amid weak demand, showed the widely tracked Nikkei Purchasing Managers Index (PMI) survey. This is the fourth contraction this financial year (2017-18).

But, firms continued to hire, seemingly considering the contraction to be an aberration.

The PMI for services fell from 51.7 in January to 47.8 in February, lowest since August. The index slipped below the 50-point mark, which separates expansion from contraction. It stood at 48.5 in November last year. PMI had fallen to 47.5 and 45.9 in August and