Services weakened in June with the ISM non-manufacturing index falling to 52.1, down from 53.7 in May. The index is now at its lowest level since January 2010. Although the report is not encouraging, any reading above 50 indicates growth in the service sector. In fact, the non-manufacturing index has remained above 50 for 30 consecutive months.
The details of June’s report were also weak. The forward looking new orders component of the index fell 2.2 points to 53.3. Business activity was down significantly, dropping 3.9 points to 51.7. The good news was the employment index, which improved from its near neutral reading of 50.8 to 52.3.
Exports were notably weak in June as we are beginning to feel pressure from Europe’s troubles.
The weakness in the non-manufacturing is not quite as bad as the poor ISM manufacturing report for June, which saw the index fall below 50 for the first time in almost three years.