(By Kevin Donovan) The Institute for Supply Management's index for economic activity in the U.S. non-manufacturing sector stayed in expansion territory but fell 1.6 percentage points in June to 52.1% vs. 53.7% in May. New Orders and Business Activity sub-indexes declined, but the employment sub-index advanced, suggesting growth at a faster rate in service jobs, which comprise the bulk of U.S. employment.
The index came in lower than anticipated, but still pointed to expansion with a reading above 50%.
The results, when added to ADP's report on private-sector job growth of 176,000 last month and the fall in weekly initial jobless claims released this morning, suggest the U.S. nonfarm payrolls report to be released Friday will reinforce the view that the U.S. economy continues to "muddle along."
Earlier this week, the ISM reported that its manufacturing index slipped below the 50% threshold that delineates expansion from contraction.