WASHINGTON – U.S. service firms grew at a slower pace in May, as both new orders and hiring slipped.
The Institute for Supply Management says that it services index fell to 55.7 in May from 57.8 in April. Still, any reading over 50 indicates that services firms are expanding.
The slower growth rate reflects the uneven rebound from a brutal winter, which caused the economy to shrink at an annualized rate of 0.7 percent during the first quarter of 2015. Yet hiring has continued at a brisk pace, leading many economists to forecast solid growth in the coming months.
The ISM is a trade group of purchasing managers. Its survey of services firms covers businesses that employ 90 percent of the American workforce, including retail, construction, health care and financial services companies.