The ISM Non-Manufacturing Index, which measures activity in the broad-based service sector, slipped from 54.6 in May to 53.3 in June, signaling activity in service industries progressed at a slower pace last month.
A reading above 50 suggests the sector is expanding.
Basically, it’s the same story we’ve been hearing about since April when the spike in weekly jobless claims first signaled a soft patch in the recovery was beginning to evolve.
The Fed has acknowledged the recent sluggishness and continues to suggest it is temporary; however, Bernanke recently conceded that policymakers have been unable to pinpoint the exact causes and have admitted they do not have a quick remedy at their disposal.
The tragic earthquake that struck Japan in March has caused disruptions in the global supply chain, which has impacted the recovery.
But the general uncertainty in the economy, weakness in housing, slow job creation and tight credit standards have all played a role.
If there is one bright spot – which in some respects, is just a reflection of latest slowdown – prices eased from 69.6 to 60.9.
Still, the data are not signaling the onset of a new recession.
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