Thomas Simons of Jefferies notes that 85% of the US labor force is in the service sector, so this is not good news for employment growth, even if it is a decent reading on other counts.
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In this June 26, 2015 photo, Eric Peterson, 47, at left, and Joe…
The Institute for Supply Management said Monday that its services index edged up to 56 in June from 55.7 in May.
Any readings above 50 signal expansion.
An increase in business activity and new orders helped boost performance despite a slow down in hiring.
Steady hiring over the past year has fueled a consumer spending rebound from a winter slump.
The employment portion of the index fell to a reading of 52.7 in June from May’s reading of 55.3.
The ISM said its purchasing managers index rose to 53.5 in June from 52.8 in May. The services sector employs 90 percent of all workers, including those at restaurants, hotels and retailers.
Non-Manufacturing Business Activity Index increased to 61.5%, which is 2.0 percentage points higher than the May reading of 59.5%, reflecting growth for the 71st consecutive month at a faster rate.
The new orders index also showed a modest increase in demand, edging up to 58.3 in June from 57.9 in the previous month.
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The majority of the 18 sectors in the survey expanded last month, although both construction and mining firms contracted.
