U.S. services activity slowed less-than-expected in June, but a measure of employment in the sector fell to a two-year low, suggesting that labor demand may be slowing as policy stances change. The Federal Reserve’s aggressive monetary policy fuels the threat of recession.
The Institute for Supply Management (ISM) said on Wednesday that its non-manufacturing activity index fell to 55.3 last month from a reading of 55.9 in May.
In its third consecutive monthly decline, the index was at its lowest level since May 2020, when the economy was facing the initial wave of the Covid-19 pandemic.
Economists polled by Reuters predicted the index would fall to 54.3.
A reading above 50 indicates expansion in the service sector, which accounts for more than two-thirds of US economic activity.
The ISM service sector employment indicator fell to 47.4, the lowest reading since July 2020 from 50.2 in May. This was the third time this year that the index was below 50.
The June decline could be a sign of slowing demand for labor or a persistent shortage of workers.
Source: CNN Brasil
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