Service sector growth continues at a slower pace

The nation’s service sector continued its expansion in June on more exporting and hiring but at a slightly slower pace.

The Institute for Supply Management's index fell slightly to 56 from 56.3 as the sector continues to bounce back from a rough winter that saw economic growth plummet.  

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Any readings above 50 signals expansion.

The index is a survey of a wide variety of businesses — the sector employs 90 percent of all workers, including those at restaurants, hotels and retailers.

Hiring picked up to 54.4 from 52.4, new orders improved to 61.2 from 60.5 and exports ticked up to 55 from 53.

The economy contracted at a 2.9 percent annual rate in the first three months of the year but economists are expecting an acceleration of upward of 4 percent in the April-June period. That could help boost growth to a 3 percent annual rate.

Economists say that temporary factors wreaked havoc on growth in the January to March quarter as bad weather plagued progress and businesses reduced their stockpiles.

If the June jobs report is any indication, the economy is clearly on the mend.

The Bureau of Labor Statistics said Thursday that employers added 288,000 jobs last month, the fifth straight month above 200,000.

In addition, gains were revised up by 29,000 in April and May. 

The unemployment rate fell to 6.1 percent from 6.3, which is the lowest since September 2008.