The pace of growth in the vast U.S. service sector accelerated slightly in May as a gauge of new orders improved, according to an industry report released Tuesday. The Institute for Supply Management (ISM) said its services index rose to 53.7 last month from 53.5 in April, slightly above economist estimates for it to hold steady at April's level. The sector has expanded for 29 consecutive months. A reading above 50 reflects expansion of the massive service sector, while a reading below 50 indicates contraction. The forward-looking new-orders component rose to 55.5 in May from 53.5 the previous month, but the employment index fell to its lowest level since November 2011 at 50.8 from 54.2. The U.S. service sector employs about 90 percent of the U.S. workforce. The ISM survey covers all sectors outside of manufacturing, including low-paying positions in construction, retail, and restaurants as well as higher-paying jobs in financial services, accounting, healthcare, and information technology. The ISM service-sector reading in May was slightly below the long-run average of 53.9 but still marked more than two years of expansion. The index reached its highest point in 12 months in February, when it was 57.3.
