The US services sector kept growing in June, but the pace slipped just enough to disappoint. The Institute for Supply Management’s Services PMI came in at 54.0, down from 54.5 in May and a tick below market expectations of around 54.2.
A reading above 50 means expansion, so the sector is still growing. But the direction matters, and right now the arrow is pointing slightly downward.
What the numbers actually say
Business activity, which tracks how much work service firms are actually doing, fell to 55.4 from 57.7 in May. New orders, a forward-looking gauge of demand, slipped to 55.1 from 57.3.
The employment index was the bright spot. It rose to 51.2, crossing above 50 for the first time since February. That means services firms added workers in June, reversing a stretch of labor contraction that had quietly persisted for several months.
