The Institute for Supply Management, a trade group of purchasing executives, said its index decreased 1.6 points in June to 53.8. The highest point since the recovery began was in May at 55.4. A reading higher than 50 indicates expansion. June’s reading is above the low of 37.2 reported in November 2008.
The index was broadened in January 2008 to consider four areas of information: business activity, employment, supplier deliveries and new orders. Before that, it only looked at business activity.
A robust service sector, which accounts for about 80 percent of U.S. employment, is crucial to keeping the economy expanding and adding jobs. Service-oriented jobs include those in hospitals, shops, restaurants, airlines, schools, banks and consulting firms, among others.
These businesses mainly depend on shoppers’ spending for revenue. Consumers have increased purchases only moderately, about 2 to 3 percent in the second quarter, said research firm Capital Economics. High unemployment, a still-rocky housing sector and volatile stock markets are weighing on people’s desire to spend.