US services sector expands modestly in June
Make us a preferred source
Make us a preferred source on Google
The news: The US services sector expanded modestly in June, according to Institute for Supply Management (ISM) data published on Thursday, aided by a pickup in business activity and bookings.
The numbers: ISM said that its nonmanufacturing purchasing managers index (PMI) increased to 50.8% in June from 49.9% in May. Economists polled by Reuters had forecast the services PMI rising to 50.5%. A PMI reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of the economy.
ISM’s Business Activity Index returned to expansion territory in June, registering 54.2%, 4.2 percentage points higher than the ‘unchanged’ reading of 50 percent recorded in May. New orders returned to expansion in June at 51.3%, an increase on May’s 46.4%.
While the services sector rebounded, ISM’s employment index contracted for the third time in 2025, with June’s reading of 47.2% lower than the 50.7% recorded in May.
The context: The modest expansion suggests a slowdown in the US economy as businesses and consumers battle with uncertainty brought about by President Trump’s trade tariffs.
What they said: Steve Miller, chair of ISM said: “June’s PMI level is a welcome return to expansion, although slow growth and economic uncertainty were frequently referenced by respondents…Middle East tensions were a new subject of comments in June, but there was no indication of related supply chain disruptions. The most common topic among survey panellists continued to be concerns about impacts related to tariffs.”
