A measure of the U.S. service economy
fell more than expected in June, suggesting the pace of the
expansion may be cooling, and indexes for prices and employment
rose to records.
The Institute for Supply Management’s index of financial
services, construction, retail and other non-manufacturing
industries dropped to 59.9, the lowest since December, from 65.2
in May. The drop of 5.3 points is the largest since October 2001,
in the aftermath of terrorist attacks on New York and Washington.
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“We aren’t running as fast as in the previous several
months, but those were unusually strong and it’s only natural to
look for this index to cool somewhat,” said Michael Moran, chief
economist at Daiwa Securities America Inc. in New York, who had
forecast a reading of 60.
The services report follows figures last week that showed job
gains and auto sales were less than expected in June. The index
still has been above 50, showing expansion, for 15 straight months
and Moran said he considers the report’s separate indicators of
higher orders and employment to be “encouraging.”
U.S. employers announced plans in June to cut 64,343 jobs, a
7.8 percent increase from the year-earlier month, a private survey
by Chicago-based placement firm Challenger, Gray & Christmas Inc.
said today. While cuts were down 12 percent from May, it’s
difficult to compare consecutive months because the data is not
seasonally adjusted.
Bloomberg News
