U.S. service sector slows less than expected in May


Register a mild, positive data point for the U.S. economy. In May, the U.S. service sector slowed at a pace less than economists had expected.

The Institute for Supply Management announced Wednesday that its non-manufacturing or service index nudged lower to 51.7% in May from 52.0 in April. Readings above 50 indicate an expansion; below 50, a contraction. Hence, because the index remained above 50 in May, the expansion in the service sector continued for a second straight month, the ISM said. Economists surveyed by Bloomberg News had expected the services index to decline to 51.0 in May.

Thirteen of the ISM's service industries grew in May. The ISM added that members' comments in May reflected concern about business conditions, including rising costs, and the overall sluggish U.S. economy.

Economic Analysis: Many economists tend to place less emphasis on the ISM services index, compared to the capital-intensive manufacturing index. Still, the services index does provide helpful clues regarding the economy and the May statistic further confirmed that the U.S. at mid-year is experiencing very sluggish, region-specific growth, but not a contraction -- at least not yet. Credit conditions are tight, but credit availability has not been totally shut down. Corporations large and small are tightening their belts, but some business-to-business spending is occurring. Lay-offs are occurring, but so far, there is no tidal wave of layoffs.
Symbol Lookup
IndexesChangePrice
DJIA+65.9212,867.15
NASDAQ+22.272,926.15
S&P 500+7.711,350.35

Last updated: February 13, 2012: 10:00 AM

Hot Stocks

General Electric

18.94+0.065(+0.34)

Alcoa

10.35+0.06(+0.58)

Apple Inc

501.08+7.66(+1.55)

Google Inc 'A'

612.04+6.13(+1.01)

Bank of America

8.25+0.18(+2.23)

Wal-Mart Stores

61.89-0.01(-0.02)

Exxon Mobil Corp

84.07+0.27(+0.32)

Ford

12.61+0.17(+1.37)

Citigroup

33.38+0.455(+1.38)

IBM

192.89+0.47(+0.24)

Yahoo

16.15+0.01(+0.06)

Starbucks

48.84+0.02(+0.04)

Microsoft

30.63+0.135(+0.44)

Home Depot

45.59+0.26(+0.57)

DailyFinance Headlines

Benzinga Headlines

TheFlyOnTheWall.com Headlines

BioHealth Investor Headlines

WalletPop Headlines

DailyFinance BlackBerry App

My Portfolios

Track your stocks here!

Find out why more people track their portfolios on AOL Money & Finance then anywhere else.

BloggingStocks Partners

More from AOL Money & Finance

BioHealth Investor Headlines

Page Loaded in 1329145217716 ms.