US service sector expands at a slower pace, hiring picks up
The ISM services index decreased 0.5 point to 54
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[NEW YORK] The US service sector expanded in June at a slightly slower pace, but firms boosted payrolls as cost pressures eased.
The Institute for Supply Management’s (ISM) services index decreased 0.5 point to 54, according to data released on Monday (Jul 6). Readings above 50 indicate growth, and the figure was in line with economists’ expectations.
Measures of business activity and new orders cooled, though still signalled solid demand. ISM’s employment index, meanwhile, jumped by the most since 2024 and indicated higher headcount for the first time since February.
Prices continued to rise but at a more subdued pace. The group’s gauge fell to a four-month low of 67.7.
An interim deal between the US and Iran has led the prices of oil and gasoline to drop in recent weeks, following a war-driven surge. While companies continue to face other cost pressures, such an easing – paired with resilient consumer demand – may have offered firms more space to pursue hiring plans.
Government data out last week showed a different hiring picture, with US payrolls rising at a slower pace in June after strong gains in the prior three months.
A measure of inventories, which had surged in May, dropped sharply in June. A gauge of order backlogs rose. BLOOMBERG
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