Economic activity in the US nonmanufacturing sector decelerated in July, according to the Institute for Supply Management’s nonmanufacturing index released today.

ISM’s nonmanufacturing index fell 3.4 percentage points in July to a reading of 55.7 from June’s reading of 59.1.

Readings above 50 generally indicate improving conditions.

However, the employment portion of the index rose in July to 56.1 from June’s reading of 53.6. Twelve industries reported increased employment, and four industries reported decreased employment. 

Comments from respondents to the survey on which the index is based include: “Lower unemployment makes higher-paid positions elsewhere more attractive,” and, “continuing to add new employees to handle the growth we are seeing in customer business.”