Investing.com - Service sector activity in the U.S. grew at the slowest pace in more than a year in May, dampening optimism over the strength of the economy and dimming prospects for higher interest rates, industry data showed on Wednesday.
In a report, the Institute of Supply Management said its non-manufacturing purchasing manager's index fell to 55.7 last month, below forecasts for a reading of 57.0 and down from 57.8 in April.
The Non-Manufacturing Business Activity Index decreased to 59.5, 2.1 points lower than the April reading of 61.6.
The New Orders Index registered 57.9, 1.3 points lower than the reading of 59.2 registered in April.
The Employment Index decreased 1.4 points to 55.3 from the April reading of 56.7.
On the index, a reading above 50.0 indicates the non-manufacturing sector economy is generally expanding, below 50.0 indicates the sector is contracting.
According to the report, 15 non-manufacturing industries reported growth in May. Overall there has been a slight slowing in the rate of growth for the non-manufacturing sector. Respondents’ comments are mostly positive about business conditions and indicate economic growth will continue.
EUR/USD was trading at 1.1234 from around 1.1214 ahead of the release of the data, GBP/USD was at 1.5320 from 1.5303 earlier, while USD/JPY was at 124.09 compared to 124.31 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 95.55, compared to 95.72 ahead of the report.
Meanwhile, U.S. stock markets were mildly higher after the open. The Dow 30 tacked on 0.35%, the S&P 500 inched up 0.25%, while the Nasdaq Composite advanced 0.4%.
Elsewhere, in the commodities market, gold futures traded at $1,190.50 a troy ounce, compared to $1,189.90 ahead of the data, while crude oil traded at $60.86 a barrel from $60.80 earlier.