The U.S. services sector expanded at a slightly slower pace in June as the non-manufacturing business activity composite index was 52.1 in the month, compared to 53.7 in May, on a seasonally adjusted basis, the Institute for Supply Management reported Tuesday.

Economists polled by Thomson Reuters had expected a 53.0 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, slid to 48.9 from 49.8.

The employment index increased to 52.3 from 50.8.

The business activity/production index slid to 51.7 from 55.6, the new orders index was at 53.3, off from 55.5; backlog of orders declined to 47.5 from 53.0; new export orders fell to 49.5 from 53.0; inventories slid to 53.0 from 56.0; inventory sentiment gained to 64.5 from 63.0; the supplier deliveries index decreased to 51.0 from 53.0; and imports climbed to 53.5 from 53.0.

Members' general comments on business in the month included:

"General state of business this month is flat, with no changes." (Construction)

"Business is steady and an increase over last month, as we begin our peak season." (Arts, Entertainment & Recreation)

"We are starting to experience a slowdown from the modest, grinding improvements our market areas have been experiencing of late." (Finance & Insurance)

"Patient counts continue to be lower than budget." (Health Care & Social Assistance)

"Business is still growing, but there has been a definite slowing in growth." (Wholesale Trade)

"We have noticed a slowing of customer counts and sales over the last 30 to 60 days, compared to the same period last year." (Accommodation & Food Services)

"Stable business globally, but softening backlog as clients further tighten discretionary spend." (Professional, Scientific & Technical Services)


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