U.S. Service Sector Returns To Growth In June

(RTTNews) - After reporting a slight contraction in U.S. service sector activity in the previous month, the Institute for Supply Management released a report on Thursday showing the service sector returned to growth in the month of June.

The ISM said its services PMI rose to 50.8 in June from 49.9 in May, with a reading above 50 indicating growth. Economists had expected the index to inch up to 50.5.

"June's PMI level is a welcome return to expansion, although slow growth and economic uncertainty were frequently referenced by respondents," said Steve Miller, Chair of the ISM Services Business Survey Committee.

He added, "This month's reading is equal to the average reading of 50.8 percent over the prior three months, indicating both stability and slight expansion in that time period."

The uptick by the headline index partly reflected a turnaround by new orders, as the new orders index surged to 51.3 in June from 46.4 in May.

The business activity index also returned to expansion territory, jumping to 54.2 in June from the "unchanged" reading of 50.0 in May.

Meanwhile, the ISM said the employment index slumped to 47.2 in June from 50.7 in May, returning to contraction territory for the third time in the last four months.

The prices index also slid to 67.5 in June from 68.7 in May, although the elevated reading still indicates notable price growth.

On Tuesday, the ISM released a separate report showing a modest increase by its reading on U.S. manufacturing activity in the month of June.

The ISM said its manufacturing PMI crept up to 49.0 in June from 48.5 in May, but a reading below 50 still indicates contraction. Economists had expected the index to inch up to 48.8.