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U.S. economy keeps up fast pace in May, ISM finds

An earlier version of this article misstated the decline in the
ISM index. The article has been corrected.

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The service side of the U.S. economy is still going strong eight
years into an economic expansion, the ISM found in May.

The service-oriented companies where most Americans work grew
at a slightly slower but still rapid pace in May, signaling
steady-as-she-goes for the U.S. economy.

The Institute for Supply Management
on Monday said its nonmanufacturing index
fell 0.6 points
to 56.9% in May. Any reading above 50 indicates improving
conditions, however.

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The index is compiled from a survey of executives who order raw
materials and other supplies for their companies. The gauge
tends to rise or fall in tandem with the health of the economy.

“The majority of respondents’ comments continue to indicate
optimism about business conditions and the overall economy,”
said Anthony Nieves, who runs the ISM service index.

New orders fell last month, no surprise after they hit a
12-year high in April.

Yet the operation tempo of services-style companies —
restaurants, financial firms, technology outfits and the like —
remained high.

“Strong market conditions bring a renewed confidence,” said an
executive at a transportation and warehousing provider.

The production gauge stood at 60.7% in May, just a bit lower
compared with April. Sixteen of the 17 industries tracked by
the ISM expanded last month. The sole exception: educational
services as the school year drew to a close.

An index that measures employment, meanwhile, jumped 6.4 points
to 57.8% — close to a two-year high.

In recent trades, the Dow Jones Industrial Average

DJIA,
+0.03%

DJIA,
+0.03%

rose slightly.

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