The service sector of the U.S. economy expanded in June, but at a slower pace than in May, according to a monthly survey of supply managers released Thursday. The expansion was also slower than analysts had been expecting.
The Institute for Supply Management, a research group based in Tempe, Ariz., reported that its index of activity in the service sector stood at 57 in June, versus analysts' expectations of 59.
In the prior month, the index came in at 60.1, in line with expectations. A reading of 50 or more indicates expansion, while below 50 indicates contraction.
June marked the 39th consecutive month of expansion in the service sector of the economy.
The indicator is closely watched since it is one of the earliest readings on economic activity in the prior month. The services sector - including banking, construction, retailing and travel - makes up about two-thirds of economic activity in the United States.
While signaling a slower rate of expansion overall, the report found that strength in the service sector was broad, with 14 of the 16 industry groups in the non-manufacturing sector reporting expansion.
On Monday, the ISM reported that the manufacturing sector expanded in June, but at a slower pace than expected. Manufacturers had said they were seeing their prices for raw materials ease slightly.
The ISM's manufacturing index registered 53.8 last month, slightly below the level of 54.4 in May and the slowest measure of growth since last August. Analysts had been looking for a reading in the manufacturing index the range of 55 to 56.