NEW YORK – 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 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 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, the new orders index was at 55.5, up from 53.5; backlog of orders remained 53.0; new export orders fell to 53.0 from 58.0; inventories rose to 56.0 from 54.0; inventory sentiment gained to 63.0 from 61.0; the supplier deliveries index increased to 53.0 from 51.5; and imports slipped to 53.0 from 56.5.
Members' general comments on business in the month included:
“Q2 will be a strong quarter for us; the building market is starting to wake up.” (Construction)
“Increased activity and resources related to projects.” (Finance & Insurance)
“The upswing in consumer confidence has led to increased business.” (Arts, Entertainment & Recreation)
“While we tend to remain optimistic about the economy, our numbers do not show a surge in activity. It appears consumers are maintaining their ‘let’s wait and see’ attitude.” (Accommodation & Food Services)
“Business outlook is flat for the remainder of 2012 with emphasis on cost containment, restructuring and cost-savings projects.” (Professional, Scientific & Technical Services)
“Business is still strong, but we have seen some softening in growth since mid-March.” (Wholesale Trade)
