ISM Services Index Improves in May

The U.S. economy’s service sector improved last month with its highest reading in seven months but still showed contraction, the Institute for Supply Management said Wednesday.

ISM’s monthly services index rose to a reading of 44 in May, from 43.7 in April, the group said in its monthly report.

Figures of more than 50 indicate expansion, while below that shows contraction. The reading was short of economists’ forecasts of a 45 reading, Bloomberg reported.

The index measures non-manufacturing components of the economy, and the services sector, which includes transportation, retail sales and financial services, accounts for nearly two-thirds of the U.S. gross domestic product.