WASHINGTON (AP) — U.S. services firms grew again last month — but at the slowest pace since May.
The Institute for Supply Management reported Thursday that its services index slid to 55.9 last month from 59.1 in October. The November reading was the lowest since May’s 55.7. Still, any reading above 50 signals that services firms are expanding.
The survey registered slower growth for business activity, new orders and employment in the services sector.
The ISM is a trade group of purchasing managers and its services survey covers businesses that employ the vast majority of workers, including retail, construction, health care and financial services companies.
The group reported Monday that U.S. factory activity plummeted last month to the lowest level in more than six years. American manufacturers have been hurt by weak economic growth overseas and a strong dollar, which makes their products more expensive in foreign markets.
The same problems also pinched services firms last month: The ISM said its index for new export orders at services companies fell to 49.5 — a sign that orders are falling — from 54.5 in October.
Services have been a source of strength in the economy this year. Services firms have added 2.5 million jobs since October 2014, 89 percent of jobs created over that period, according to the Labor Department.
The overall U.S. job market looks robust. Unemployment has fallen to a seven-year low of 5 percent. Wages, which have been stagnant, are finally showing signs of improvement.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said the November dip in the overall services index is likely “temporary, given the strength of the labor market and consumers’ cashflows.”