WASHINGTON – U.S. services companies expanded at a slightly slower pace in May compared with the previous month, a sign that modest economic growth is likely to continue.
The Institute for Supply Management, a trade group of purchasing managers, said Monday that its services index slipped last month to 56.9 from 57.5 in April. Any reading above 50 indicates expansion. Sales and new orders grew more slowly, while a measure of employment showed companies stepped up hiring.
Growth has likely picked up in the April-June quarter after a sluggish start to the year. Americans are spending a bit more, which boosts services firms, such as retailers, restaurants and hotels. Economists forecast growth will reach an annual pace of 3 percent, up from just 1.2 percent in the January-March quarter.
Last month’s reading is still above the 2016 average of 54.9, several analysts pointed out.