US service sector growth higher in June
Growth in the US service sector rose in June, according to data released by the Institute for Supply Management on Monday.
However, the index of activity in the sector ticked up slightly less than forecast.
The ISM’s non-manufacturing purchasing managers index climbed up to 56.0 in June from a 13 month low of 55.7 in May.
A reading above 50 is a sign of expansion in the sector.
The result was just shy of what analysts expected of 56.2 in a Reuters survey.
The business activity/production index rose to 61.5 from 59.5. The new orders index increased to 58.3 from 57.9 in May, while the exports index dropped to 52.0 from 55.0 the previous month.
The employment index fell for a second consecutive month to 52.7 from 55.3.
Paul Ashworth, Chief U.S. Economist at Capital Economics, said:
”With the headline index still at a healthy level and the business activity index rebounding too, the drop in the employment index is not too much of a concern, particularly not when we already know that payrolls increased by a relatively healthy 223,000 in June.”
According to the WSJ, economists at Jefferies said in a research note:
“The service sector continues to expand at a solid pace, but the pace of expansion is no longer accelerating,”