US service sector contracts for second month in May

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FILE - In this Thursday, April 2, 2020 file photo, bagel shop manager Samantha Maddocks runs then lone shop still open in one walkway in the Pike Place Market in Seattle. Growth in the U.S. service sector slowed in March with a much bigger decline expected in coming months from all the shutdowns and job layoffs that have occurred because of efforts to contain the coronavirus. (AP Photo/Elaine Thompson, File)

WASHINGTON – The U.S. services sector shrank for a second month in May as the coronavirus pandemic triggered shutdowns and layoffs around the country.

Activity did rise from levels last month that had not been seen since the recession.

The Institute for Supply Management said Wednesday that its service sector index stood at 45.4 last month, up slightly from an April reading of 41.8.

Any reading below 50 signals that the service sector, where the majority of Americans work, is in contraction. The April decline broke a string of more than 10 years of expansion in the services sector.

The continued contraction in service industries followed a similar pattern in the industrial sector. The ISM reported earlier this week that manufacturing activity remained in contraction territory in May, with a reading of 43.1, up slightly after registering 41.5 in April.