U.S. Service Industries Expand at Slower Pace Than Expected

U.S. service providers expanded in June by less than forecast as a measure of employment contracted, reflecting employers’ struggle to attract workers in industries like hotels and restaurants.

The Institute for Supply Management’s services index fell to 60.1 last month from a record 64 in May. Readings above 50 indicate expansion. Orders and business activity also settled back. The June figure compared with the 63.5 median projection in a Bloomberg survey of economists.

While cooling from a month earlier, the report shows still-solid demand for services like restaurant dining, hotel stays and travel. The ISM’s measure of order backlogs was ...