US Service Activity Nearly Stagnates as Employment Contracts (3)

The US services sector effectively stagnated in July as firms — faced with tepid demand and rising costs — reduced headcount.

The Institute for Supply Management’s index of services declined last month to 50.1, below all estimates in a Bloomberg survey of economists. Readings above 50 indicate expansion.

The employment index dropped to 46.4, contracting for the fourth time in five months and marking one of the lowest readings since the pandemic. The group’s measure of prices paid for materials and services, meanwhile, climbed to the highest since October 2022.

The data, released Tuesday, paint a picture of a sluggish ...