US service companies expanded in May

In this May 29, 2012 photograph, Big Apple Inn grill cook Tyechia Davis prepares the sausage meat for a "smoke" sandwich in Jackson, Miss. U.S. service companies, which employ roughly 90 percent of the work force, expanded at a slightly faster pace in May, marking the 29th straight month of expansion. (AP Photo/Rogelio V. Solis, File)

In this May 29, 2012 photograph, Big Apple Inn grill cook Tyechia Davis prepares the sausage meat for a "smoke" sandwich in Jackson, Miss. U.S. service companies, which employ roughly 90 percent of the work force, expanded at a slightly faster pace in May, marking the 29th straight month of expansion. (AP Photo/Rogelio V. Solis, File)

WASHINGTON (AP) ? U.S. service companies, which employ roughly 90 percent of the work force, expanded at a slightly faster pace in May, marking the 29th straight month of expansion.

The Institute for Supply Management said Tuesday that its index of non-manufacturing activity edged up to 53.7 last month from an April reading of 53.5.

The May reading was slightly below the long-run average for the index of 53.9. A reading above 50 indicates expansion.

The ISM survey covers all sectors outside of manufacturing. That includes retail, construction, financial services, health care and hotels.

It reached the highest point in 12 months in February, when it was 57.3.

The ISM's manufacturing index, released last week, showed that manufacturing grew more slowly in May, hampered by weaker hiring and declining production. But in a hopeful sign, new manufacturing orders hit a 13-month high.

The service sector includes low-paying positions in retail and restaurants. But it also has higher-paying jobs in professions such as information technology, accounting and financial services.

The government reported Friday that the overall economy added just 69,000 jobs in May, the smallest number in a year, while the unemployment rate edged up from 8.1 percent to 8.2 percent. The dismal report on jobs heightened fears that the economy is struggling. Economists are concerned that the economy could hit a soft patch this year just as it did in 2010 and 2011.

Associated Press

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