The U.S. services sector expanded at a faster pace in July as the non-manufacturing business activity composite index was 58.7 in the month, compared to 56.0 in June, on a seasonally adjusted basis, the Institute for Supply Management reported Tuesday.
Economists polled by Thomson Reuters had expected a 56.1 level.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
The prices paid index dipped to 60.9 from 61.2.
The employment index increased to 56.0 from 54.4.
The business activity/production index grew to 62.4 from 57.5, the new orders index was at 64.9, up from 61.2; backlog of orders remained at 53.0; new export orders slipped to 53.0 from 55.0; inventories fell to 51.0 from 53.5; inventory sentiment slid to 58.0 from 60.5; the supplier deliveries index rose to 51.5 from 51.0; and imports grew to 54.5 from 53.0.
Members' general comments on business in the month included:
"Conditions are improving." (Construction)
"Slight improvement in the economy, but still experiencing delays in client project start-ups. Expecting some improvement in 4th quarter." (Professional, Scientific & Technical Services)
"Animal proteins seeing impact of drought, PEDv [Swine virus], thinning of herds and supply and demand issues. Produce pricing is going up due to drought and crop yields." (Accommodation & Food Services)
"Second half of the year is looking promising for increased orders versus last year." (Information)
"The area continues to benefit from a solid economy bolstered by the tourism and a rebuilding construction sector." (Public Administration)
"Business is still very good. Expecting continued growth in the 2nd half of the year." (Retail Trade)
"Business has been strong this summer after a late start due to the poor spring weather." (Wholesale Trade)
