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The US service sector, which
accounts for almost 90% of the country's work force, expanded for a 19th
consecutive month in June. However, growth slowed from May, in a further sign
that the economy recovery is spluttering.
Anthony Nieves, chair of the
Institute for Supply Management Non-Manufacturing Business Survey Committee
said: "The NMI (Non-Manufacturing Index) registered
53.3% in June, 1.3 percentage points lower than the 54.6% registered in May, and
indicating continued growth at a slower rate in the non-manufacturing sector.
The Non-Manufacturing Business Activity Index decreased 0.2 percentage point to
53.4%, reflecting growth for the 23rd consecutive month, but at a slightly
slower rate than in May. The New Orders Index decreased by 3.2 percentage points
to 53.6%. The Employment Index increased 0.1 percentage point to 54.1%,
indicating growth in employment for the 10th consecutive month and at a slightly
faster rate than in May.
The Prices Index decreased 8.7
percentage points to 60.9%, indicating that prices increased at a slower rate in
June when compared to May. According to the NMI, 15 non-manufacturing industries
reported growth in June. Respondents' comments are mixed about the business
climate and vary by industry and company. The most prominent concern remains
about the volatility of prices."
On Monday, the ISM reported that the
manufacturing sector expanded in June at a faster pace than the previous month,
as supply disruptions stemming from Japan's earthquake faded.
The 15 non-manufacturing industries
reporting growth in June based on the NMI composite index - - listed in order -
- are: Real Estate, Rental & Leasing; Transportation & Warehousing; Wholesale
Trade; Professional, Scientific & Technical Services; Mining; Construction;
Other Services; Educational Services; Arts, Entertainment & Recreation; Public
Administration; Management of Companies & Support Services; Accommodation & Food
Services; Information; Utilities; and Retail Trade. The two industries reporting
contraction in June are: Finance & Insurance; and Health Care & Social
ISM's Non-Manufacturing New
Orders Index grew in June for the 23rd consecutive month. The index registered
53.6%, a decrease of 3.2 percentage points from the 56.8% reported in May.
Comments from respondents include: "Higher level of spending due to more
budgets approved for this fiscal year" and
"Increase in national accounts business."
Employment activity in the
non-manufacturing sector grew in June, as ISM's Non-Manufacturing Employment
Index registered 54.1%. This reflects an increase of 0.1 percentage point when
compared to the 54% registered in May. Fourteen industries reported increased
employment, three industries reported decreased employment, and one industry
reported unchanged employment compared to May. Comments from respondents
include: "Continuing to fill backlog of positions" and "Hiring to get back to required staffing levels."