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ISM Services Holds Flat at 55.4

The Institute for Supply Management said its non-manufacturing index, which tracks the services segment of the economy, read 55.4 in May.
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TEMPE, Ariz. (

TheStreet

) -- Economic activity in the nation's services sector held flat last month, though continued reflecting expansion, according to a survey of executives released Thursday.

The Institute for Supply Management said its non-manufacturing index, which tracks the services segment of the economy, read 55.4 in May. The mark remained unchanged from the 55.4 reading registered in April, and landed close to consensus expectations provided by

Briefing.com

calling for a subtle rise to 55.6.

The index was created using survey responses from executives throughout the U.S. Typically, a reading above 50 tends to suggest growth and expansion in the sector, while a reading below that mark hints at a slowing contraction.

Several individual indicators within the report also showed improvement. An index measuring inventories gained a full 8 points to read 62.5 last month, and a production gauge edged higher to 61.1 from 60.3 in April. Still, readings on new orders and prices took a step back in May, despite remaining above the all-important 50 threshold.

The report also suggested the labor market for services is on the mend. An index tracking employment reflected growth for the first time in over two years, reading 50.4 in May after registering 49.5 in April.

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The news could be prelude for Friday's highly anticipated jobs report from the labor market. Economists, on average, believe employers added another 500,000 to nonfarm payrolls last month, while the nation's unemployment rate probably ticked lower to 9.8% from 9.9%.

Already Thursday, separate reports said

first-time filers for state unemployment insurance edged lower last week, while private sector employers added another 55,000 jobs to their payrolls last month.

Stocks were nearing the flatline after the flurry of data, which also included some underwhelming

productivity and factory figures. Most recently, the

Dow Jones Industrial Average

was adding 14 points, or 0.1%, at 10,264, while the

S&P 500

was ahead by 3 points, or 0.3%, to 1,102.

--Written by Sung Moss in New York