Service sector cools, but hiring is strong

NEW YORK — The U.S. service sector’s expansion cooled off somewhat in June, a closely watched private survey found, though hiring and orders for new goods heated up compared to May’s pace.

The Institute for Supply Management’s non-manufacturing index for June ebbed to 59.9 after hitting 65.2 in May and 68.4 in April. The June reading was well below the 63.0 expected by economists. Any reading above 50 indicates expansion.

The ISM’s non-manufacturing index is comprised mostly of service-related businesses, which make up the majority of overall U.S. economic activity.

The ISM noted that even as the increase for June was slower than in May, it was nonetheless the 15th straight month of growth for the sector. The ISM service-sector data follow the group’s report last week on manufacturing, which also showed a moderation in overall activity for June.

Of 16 sectors measured, 13 reported increased business activity compared with May, the ISM said in a press release. June’s best performers were the transportation, utilities and agriculture sectors.

The report’s employment index suggested that hiring by services firms continues to improve, registering the ninth straight month of gains and hitting the highest mark since the report’s inception in 1997.

The June reading rose to 57.4 from 56.3 in May. Also, new orders ticked upward to 62.4 in June from 61.3 a month before.