A report has shown that the important US service sector shrank slightly for the second consecutive month in July, but by less than economists had expected.
The Institute for Supply Management said its non-manufacturing index came in at 49.5 for July, up from June's 48.2. A reading below 50 means activity fell.
A decline in the index which measures prices paid by firms slid to 80.8 from June's record 84.5, indicating a slight easing in inflationary pressures.
Despite the unexpectedly strong result in the overall index, the report was still weak, analysts said. They added that a fall in the new orders index was of particular concern for future growth in the sector.
The service sector represents about 80% of US economic activity, including businesses such as banks, airlines, hotels and restaurants.
