Service Industries in U.S. Expand at Slowest Pace in a Year
Source: Bloomberg
June 3, 2015 — 10:00 AM EDT
Service industries expanded in May at the slowest pace in 13 months as orders eased, signaling tempered improvement in the biggest part of the U.S. economy.
The Institute for Supply Management’s non-manufacturing index, which includes an array of industries from real estate to dining, declined to 55.7 from April’s 57.8, the Tempe, Arizona-based group said Wednesday. Readings above 50 signal expansion and the May gauge was weaker than the 57 median forecast in a Bloomberg survey.
Limited growth in orders reflects an American consumer who has been saving the extra cash from low gasoline prices and rising employment rather than spending it. Stronger household demand would help invigorate growth at service providers that make up almost 90 percent of the economy.
“There’s hardly any positive impetus right now in consumer spending, which is a large portion of the service sector,” Millan Mulraine, deputy head of U.S. research and strategy at TD Securities USA in New York, said before the report. Still, economic growth will “rebound from last quarter.”
Read more: http://www.bloomberg.com/news/articles/2015-06-03/service-industries-in-u-s-expand-at-slowest-pace-in-a-year
