The U.S. services sector expanded at a slightly faster pace in May as the non-manufacturing business activity composite index was 53.7 in the month, compared to 53.5 in April, on a seasonally adjusted basis, the Institute for Supply Management reported Tuesday.

Economists polled by Thomson Reuters had expected a 53.5 level. An index reading above 50 suggests expansion.

The prices paid index, closely watched for signs of inflation, slid to 49.8 from 53.6. The employment index decreased to 50.8 from 54.2. The business activity-production index grew to 55.6 from 54.6, and the new orders index was at 55.5, up from 53.5. The backlog of orders remained at 53.0.

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