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Summary Absence of sustained strength and limited manufacturing growth demonstrate economic slowdown.
US Service industries expanded in July at the slowest pace in 17 months as orders and employment cooled, indicating the biggest part of the US economy had little spark to begin the second half of the year.The Institute for Supply Management’s index of non- manufacturing businesses, which covers about 90 percent of the economy, dropped to 52.7 from 53.3 in June. Readings above 50 signal expansion, and the median projection in a Bloomberg News survey was for 53.5 in July. Companies hired fewer workers last month than in June, a report from ADP Employer Services showed.The absence of sustained strength in services along with limited manufacturing growth adds to evidence of a broader economic slowdown. Package-delivery company United Parcel Service Inc. (UPS) is among businesses bracing for weaker demand as unemployment holds above 9 percent and wages stagnate.“The economy will continue to muddle along,” said Yelena Shulyatyeva, an economist at BNP Paribas in New York, who forecast the index would drop to 52.5. “That doesn’t help to reduce the unemployment rate. Economic momentum going into the second half isn’t as strong as expected.”Companies added 114,000 employees to their payrolls in July after a revised 145,000 gain in previous month that was less than initially projected. A slowdown in hiring means consumers are unlikely to boost the spending that accounts for 70 percent of the economy.
