Ahead Of The Bell: ISM Service Sector Index

NEW YORK (AP) — Economists expect a trade group's measure of the health of the U.S. services sector to contract for the eighth straight month in May, but at the slowest pace since September.

The Institute for Supply Management's services index likely registered a 45 in May, according to analysts polled by Thomson Reuters. That would be the highest level since September, when the index was at 50 and up from 43.7 in April.

Still, any reading below 50 indicates the services sector is shrinking. Service industries such as retailers, financial services, transportation and health care make up about 70 percent of the country's economic activity.

The ISM, a Tempe, Ariz.-based trade group of purchasing executives in 18 industries, is scheduled to release the report Wednesday at 10 a.m. EDT.

The report is based on a survey of the institute's members and covers indicators such as new orders, employment and inventories.

In April, new orders jumped to 47 from 38.8 in March. Meanwhile, the ISM companion index for manufacturing on Monday showed new orders in May turned positive for the first time since November 2007. Growth in new orders for businesses are the key to ramping up production, and eventually hiring workers.