U.S. Nonmanufacturing Activity Growth Slowed in May

Economic activity across the U.S. service sector decelerated in May but continued to expand at a solid pace.

The Institute for Supply Management on Monday said its index of nonmanufacturing activity -- which tracks a range of industries including retailing, health care, finance and mining -- fell to 56.9 in May from 57.5 in April.

Economists surveyed by The Wall Street Journal had expected a May reading of 57.0. A number above 50 indicates expansion while a reading under 50 indicates contraction.

The gauge has signaled continuous service-sector growth since the beginning of 2010. The recession ended in mid-2009.

The broader U.S. economic expansion has remained on track so far in 2017.

The unemployment rate in May fell to 4.3%, its lowest level in 16 years, though the pace of hiring slowed, the Labor Department reported last week. Gross domestic product expanded at a modest 1.2% seasonally adjusted annual rate in the first quarter but is expected to pick up in the current quarter; forecasting firm Macroeconomic Advisers on Friday predicted a second-quarter growth rate of 2.9%.

A separate ISM gauge tracking the manufacturing sector inched up in May to 54.9, marking nine consecutive months of industrial expansion.

Write to Ben Leubsdorf at ben.leubsdorf@wsj.com

(END) Dow Jones Newswires

June 05, 2017 10:30 ET (14:30 GMT)