WASHINGTON, D.C. ― US services sector activity shrank unexpectedly in June due in part to a pullback in new orders and employment, according to survey data released on Wednesday.
The Institute for Supply Management's services index came in at 48.8 percent last month, notably lower than May's 53.8-percent figure.While analysts expected the index to tick down, they did not forecast a contraction ― meaning a reading below the 50-point threshold.Analysts noted that the current level is the lowest since May 2020, and the indicator could be a signal that the world's biggest economy is cooling on the back of high interest rates.
'The decrease in the composite index in June is a result of notably lower business activity, a contraction in new orders for the second time since May 2020 and continued contraction in employment,' said ISM survey chairman Steve Miller.The latest figure marks the second contraction in three months.'Survey respondents report that in general, business is flat or lower, and although inflation is easing, some commodities have significantly higher costs,' Miller added.
Services Activity Contracts Unexpectedly As Orders Shrink
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