The economy is still contracting, but U.S. service sector data is slowly reaching levels of stability.
The Institute for Supply Management's index of non-manufacturing businesses -- which comprise almost 90% of the economy -- rose to 47% in June from 44% in May. Economists expected the index to jump to 46%. Readings less than 50 signal contraction.
This is the index's third consecutive month of improvement.
The business activity index rose to 49.8% in June from 42.4% in the previous month, while new orders grew to 48.6% from 44.4%.
The employment index increased to 43.4% from 39%. The price index rose to 53.7% from 46.9% in the previous month.
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