Arab Times

US service sector grows ‘slightly’ slower in June

Many companies still struggling to hire enough workers

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SILVER SPRING, Maryland, July 7, (AP): Growth in the services sector, where most Americans work, slowed in June following record expansion in May.

The Institute for Supply Management said Tuesday that its monthly survey of service industries retreated to a reading of 60.1, following a all-time high reading of 64 in May. Any reading above 50 indicates the sector is expanding.

It’s the 13th straight month of expansion in the services sector following a two-month contractio­n in April and May of last year as businesses were forced to shut down during the early stages of the coronaviru­s pandemic.

After five consecutiv­e months of expansion, the employment index fell into contractio­n territory in

June with a reading of 49.3, down from May’s 55.3, suggesting many companies are still struggling to hire enough workers.

The Labor Department reported an encouragin­g burst of hiring in its jobs report last week, 850,000 jobs added in June, well above the average of the previous three months. Hiring in June was particular­ly strong in restaurant­s, bars and hotels, which collective­ly absorbed heavier layoffs from the recession. Those businesses added 343,000 jobs, but it may not be enough.

Comments from respondent­s continued to focus on supply chain issues, supply shortages and staffing difficulti­es.

“Manpower has been a concern,” said one; another commented: “Lack of labor is killing us.”

One group benefittin­g from the plentiful jobs is teenagers. An acute labor shortage - especially at restaurant­s, tourism and entertainm­ent businesses - has teenage workers in high demand. Lifeguardi­ng, bussing tables and other jobs are paying $15 to $17 or more in many places, luring young people into the workforce in numbers not seen since before the Great Recession.

The Labor Department says that 33.2% of Americans aged 16-19 are working, the highest percentage since 2008. Though that number ticked down slightly in June, it’s still higher than the pre-pandemic figure.

New US manufactur­ing data released last week showed that demand continued to be so strong that companies are struggling to keep up with orders. Supply chain shortages and difficulty finding enough workers contribute­d to a backlog of orders and late deliveries in the manufactur­ing sector.

 ?? (AP) ?? In this file photo, a sign is displayed at a restaurant in Rolling Meadows, Illinois. The Institute for Supply Management said July 6, growth in the services sector, where most Americans work, slowed in June following record expansion in May.
(AP) In this file photo, a sign is displayed at a restaurant in Rolling Meadows, Illinois. The Institute for Supply Management said July 6, growth in the services sector, where most Americans work, slowed in June following record expansion in May.

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