U.S. Services Index Indicates Slightly Slower Growth In June

(RTTNews) - Growth in U.S. service sector activity slowed slightly in the month of June, according to a report released by the Institute for Supply Management on Monday.

The ISM said its services PMI edged down to 54.0 in June after rising to 54.5 in May, although a reading above 50 still indicates growth. The modest decrease matched economist estimates.

The slight pullback by the headline index came amid slowdowns in the pace of growth in both business activity and new orders.

The business activity index slid to 55.4 in June from 57.7 in May, while the new orders index fell to 55.1 in June from 57.3 in May.

Meanwhile, the employment index jumped to 51.2 in June from 47.9 in May, returning to expansion territory for the first time in four months.

"World Cup-related hiring in the U.S. likely contributed to the increase to the Employment Index," said Steve Miller, Chair of the ISM Services Business Survey Committee."

"Of the 18 services industries, nine of them — representing over 58 percent of U.S. gross domestic product (GDP) — reported higher employment levels in June," he added. "This represents widespread confidence that hiring is again warranted to support activity levels."

The report also said the prices index slumped to a four-month low of 67.7 in June from 71.3 in May, indicating a slowdown in the pace of price growth.

A separate report released by the Institute for Supply Management last Wednesday showed a modest decrease by its reading on U.S. manufacturing activity in the month of June.

The ISM said its manufacturing PMI dipped to 53.3 in June after rising to 54.0 in May. Economists had expected the index to edge down to 53.9.