Economic activity in the US services sector expanded in May but at a slower rate than in April, according to the Institute for Supply Management’s “Services ISM Report on Business.” The report’s Services PMI composite index slipped to a reading of 50.3% in May from 51.9% in April; however, readings above 50% indicate growth. Still, May’s reading is the lowest since December when the Services PMI fell to a reading of 49.2%, indicating a contraction.

While growth continued overall, the employment index — a portion of the Services PMI composite index — fell to a reading of 49.2% in May, which indicates a contraction.

Data for the ISM report comes from a survey of supply executives in the services sector. Their comments on employment included: “We are trying to do more with the same staff because margins in the industry have compressed,” and “Our company is currently on a hiring freeze until there’s a better understanding of where the economy is headed.”

Anthony Nieves, chair of the ISM’s Services Business Survey Committee, said the overall situation in the services sector appears to be holding steady for now.

“The majority of respondents indicate that business conditions are currently stable; however, there are concerns relative to the slowing economy,” Nieves said.