According to the latest report, the ISM barometer of business conditions at service companies, such as restaurants and hotels, rose to 53.9% in June from 50.3% in the previous month. Economists surveyed by the Wall Street Journal had predicted the index to increase to 51.3%.
This marks the sixth consecutive month that the index has been above the threshold for expansion, which is set at 50%.
In June, fifteen out of eighteen industries reported growth. New orders, activity, and employment all experienced positive growth. While most respondents mentioned that business conditions remain stable, they expressed cautiousness regarding inflation and future prospects.
Another report from S&P Global revealed that its service index rose to 54.4 in June compared to the initial estimation of 54.1. However, this was slightly lower than the May reading of 54.9.
The Big Picture
Throughout this year, the service sector and consumer spending have been the primary drivers of the economy. The data obtained from June do not indicate any signs of a slowdown.
As a result of the economic data suggesting that the Federal Reserve will likely continue raising interest rates, stocks (DJIA, -1.21%; SPX, -1.21%) experienced a decline. Additionally, the yield on the 10-year Treasury note TMUBMUSD10Y rose above 4%.