US service sector grows at slowest pace in 18 months

NEW YORK: The service sector of the US economy grew last month at the slowest pace since January 2010, said a report released on Wednesday.

The Institute for Supply Management’s Non-Manufacturing Index came in at 52.7 points in July, down from 53.3 in June and well short of the 53.6 reading predicted by most analysts.

The July NMI figure was the lowest since January 2010, when the index stood at 50.7 points.

Any reading above 50 is viewed as positive and by that measure, July was the 20th consecutive month of expansion in the service sector.

The index is calculated on the basis of data and observations provided by executives and business owners.

“Respondents’ comments remain mixed; however, for the most part they indicate that business conditions are flattening out,” Anthony Nieves, chair of ISM’s Non-Manufacturing Business Survey Committee, said in a statement.

The service-sector New Orders Index fell 1.9 points in July to 51.7, while the Employment Index dipped 1.6 points to 52.5, though it remained in positive territory for the 11th consecutive month.

Prices in the sector declined last month by 4.3 points to 56.6 percent, reflecting a slowdown in price increases, the ISM said.

More encouragingly, the Non-Manufacturing Business Activity Index rose 2.7 points to 56.1 percent, marking two solid years of expansion.