The services sector expanded at a slower pace in June as the non-manufacturing business activity composite index was 53.3 in the month, down from 54.6 in May on a seasonally adjusted basis, the Institute for Supply Management reported Wednesday.
Economists polled by Thomson Reuters had expected a 54.0 level.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
The prices paid index, closely watched for signs of inflation, dipped to 60.9 from 69.6. The employment index increased to 54.1 from 54.0.
The business activity-production index slid to 53.4 from 53.6, the new orders index was at 53.6, down from 56.8, and the backlog of orders dropped to 48.5 from 55.0.
New export orders remained 57.0, inventories fell to 53.5 from 55.0, inventory sentiment rose to 58.5 from 55.0, the supplier deliveries index slipped to 52.0 from 54.0, and imports decreased to 46.5 from 50.5.