Separate service-sector indexes dropped between May and June, hinting that the economy is slowing in the U.S. and abroad.
The Institute for Supply Management's widely watched index of U.S. service companies fell from 55.4 in May to 53.8 last month. A reading above 50 indicates growth, so the service sector is still expanding. Yet its pace of growth is slowing - and if service firms continue to post torpid growth, worries about the speed of job creation could come to the fore once again.
As the Labor Department's June employment figures show, the economy is hardly creating jobs at all. Just 83,000 private-sector positions were created last month, far fewer than the 200,000 that would be needed to lower the jobless rate.
Yet the U.S. service sector isn't alone in its struggles. According to JPMorgan, service companies elsewhere in the world saw new orders fall between May and June. The bank's service index slid from 56.3 to 54.9; particularly lacking was the new business component of the index, which dropped from 54.2 to 52.6.
"The June PMI data provided further evidence that growth of activity and new orders are starting to taper off," JPMorgan Global Economics Coordination director David Hensley said.
