NEW YORK, July 5 The pace of growth in the U.S.
services sector slowed in June to its lowest level since January
2010 as new orders waned, though employment improved, an
industry report showed on Thursday.
The Institute for Supply Management said its services index
fell to 52.1 from 53.7 in May, shy of economists' forecasts for
53.0, according to a Reuters survey.
A reading above 50 indicates expansion in the sector.
The new orders component slipped to 53.3 from 55.5, while
the employment measure rose to 52.3 from 50.8.
The gain in employment was a heartening sign coming a day
ahead of the government's more comprehensive labor market
"With the drop in new orders and a rise in employment,
that's an indication that companies might be adding workers with
productivity slowing. They are hiring even if they don't want
to," said Gus Faucher, senior macroeconomist at PNC Financial
Services in Pittsburgh.
The gauge of new orders for exports contracted to 49.5 from
53.0, suggesting the euro zone debt crisis was hampering demand.
U.S. stocks held losses immediately following the data,
while Treasuries prices extended gains. Financial markets were
taking in a series of moves by central banks overseas to try to
tackle a downturn in economic activity.