The services sector index expands in June, but at a slower pace - USA Today

WASHINGTON - A key index for the services sector, which employs nearly 90% of the active population of the country, expanded to a 19th consecutive month in June. But the slow growth in May. Richard Drew, AP

In this photo of June 29, 2011, lunch is served to the guests at The Palm restaurant in the neighbourhood of Tribeca in New York.

Richard Drew, AP

In this photo of June 29, 2011, lunch is served to the guests at The Palm restaurant in the neighbourhood of Tribeca in New York.

The Institute for supply management said Wednesday that its index for tempered service companies 53.3 in June of 54.6 in May. Any reading above 50 indicates expansion.The Group of private trade measures activity for a range of industries, including retail, health care, finance and construction services.The index reached a record of five years of 59.7 in February. But since then, decreased growth. The index plunged to a minimum of 37.6 in November 2008 to the financial crisis. The sector has contracted for all but three months in gas 2009.High and food prices have left consumers with less money to spend on discretionary goods, such as holidays, appliances and furniture. Who has evil of retailers, restaurants and hotels. The index has fallen to 52.8 in April, the lowest reading since August.Gas prices have declined since early may reaching an average national of almost $ 4 per gallon. That should make it easier for consumers to spend more on other goods. Price of gasoline on average $3.57 a gallon across the country Wednesday, according to AAA.A separate ISM index to monitor activity in the manufacturing sector expanded in June at a faster pace than the previous month, as a disruption of supply from the earthquake of Japan faded.Still, most economists say that the economy grew at a low rate in the period April-June. Likely growth came in better than the annual rate of 1.9% recorded in the first three months of the year.Many economists expect growth to rebound a bit in the second half of the year. It is expected to increase to 3.2% during the period from July to December, according to a poll of 38 economists the Associated Press.Growth must be already significantly reduce the rate of unemployment, which was 9.1% last month. The economy should grow at a rate of 5% for a whole year to significantly reduce the unemployment rate. Only 3% economic growth in the year would hold stable unemployment and keep pace with population growth.Employers added only 54 000 net new jobs in may, much slower than the average gain of 220 000 a month in the previous three months.The Government reported Friday on the hiring of data in June. Economists expect the economy added only 90 000 jobs and the unemployment rate remained unchanged, survey by FactSet.

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