The U.S. service sector shrank in April at the slowest pace since last autumn, a private research organization reported Wednesday. The Institute for Supply Management (ISM) said its services index rose to 44.0 last month, up slightly from 43.7 in April. It was the highest reading since last October, when the index stood at 44.6. A reading above 50 signifies expansion, while a reading below 50 reflects contraction. Despite May's improvement, it was still the eighth consecutive monthly decline in the massive service sector. Service industries like retailers, financial services, transportation, and health care comprise about 70 percent of U.S. economic activity. Any rebound in the sector depends on improved consumer spending. New orders, essential for business expansion, shrank faster in May, dropping to 44.4 from 47.0 the previous month. New orders had risen from 38.8 in March, sparking hopes of a rebound. “Everyone was hoping we'd bottomed out, going more sideways” because of the April data, said ISM survey committee chairman Anthony Nieves. “We're just not there yet.”
