ISM Non-Manufacturing Slows Modestly

BOTTOM LINE: Service industries in the US expanded at a slower pace last month as consumer demand weakened and costs increased, Bloomberg said. The Prices Paid component of the index rose to 77.5, the highest since September, versus 70.5 the prior month. The New Orders component of the index fell to 59.6 from 64.6 the prior month. Finally, the Employment component of the index rose to 58 versus 56.5 in April. I expect this index to decline modestly over the intermediate-term as consumer spending slows to average levels from robust rates. The prices paid component has likely peaked for this cycle and should begin decelerating this month.