The current economic downturn is being felt not only by what remains of the manufacturing sector of the U.S. economy, but also in the service sector. For the second month in a row the industry has reported that business activity has contracted, according to CNNMoney.com.
The service sector is comprised of real estate, construction, mining, fishing, agriculture, health care, finance, insurance and administration.
Energy and commodity prices have increased for 62 consecutive months, which is taking its toll on businesses in the service industry. However, businesses are reluctant to pass the rising prices on to the consumers because industry insiders say that the American consumer is already strapped by the same set of circumstances.
Source CNNMoney.com:
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Business activity in the service sector contracted for the second straight month in July, although at a slower rate than in June, according to a key survey of industry executives released Tuesday.
The Institute for Supply Management's (ISM) non-manufacturing index rose to 49.5 from 48.2 in June. Economists were expecting a reading of 48.7, according to a consensus compiled by Briefing.com.
A reading above 50 indicates growth in the sector, and a reading below 50 means that the sector is contracting.
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