The overall economy grew for the 25th straight time, while the manufacturing sector expanded for the 23d time, the Institute for Supply Management reported Friday.
According to the institute’s monthly report on business, the ISM index climbed to 55.3 in May from 53.5 in May.
Economists had predicted the index would slip to 51.9.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
The closely watched prices paid index slid to 68.0 from 76.5. The employment index was at 58.2, down from 62.7 the previous month.
The production index increased to 54.5 from 54.0, the new orders index rose to 51.6 from 51.0, the supplier deliveries index gained to 56.3 from 55.7, the export orders index decreased to 53.5 from 55.0, and the imports index fell to 51.0 from 54.5.
The inventories index increased to 54.1 from 48.7, the customers’ inventories index jumped to 47.0 from 39.5, and the backlog of orders slumped to 49.0 from 50.5.
Respondents said they see slight declines in inflation and sales, with consumers remaining cautious.