US service sector weakens: ISM

0 Comments | AFP, August, 2006

WASHINGTON (AFP) — The US economy's pivotal services sector weakened in July, the Institute for Supply Management said.

The ISM index of non-manufacturing activity slipped to 54.8 percent from 57.0 percent in June. That was less than Wall Street's consensus target of 56.5 percent.

The report will feed into a meeting next Tuesday of Federal Reserve policymakers, with economists evenly divided about whether the US central bank will hike interest rates afresh or put them on hold.

Any figure above 50 indicates expansion, so the ISM report suggested continuing expansion in services, which makes up the lion's share of activity in the world's biggest economy.

"The overall indication in July is continued economic growth in the non-manufacturing sector,...