Services firms expand at slowest pace in 17 months

By CHRISTOPHER S. RUGABER | August 3, 2011 | 10:15 AM EDT

WASHINGTON (AP) — The U.S. service firms, which employ nearly 90 percent of the country's work force, experienced their weakest growth in 17 months in July.

The Institute for Supply Management says its index for services companies fell to 52.7, from 53.3 in June. Any reading above 50 indicates expansion.

The report confirms other data that show the economy is struggling two years after the recession ended. Growth slowed to less than 1 percent in the first six months of this year, the government said Friday.

The ISM's index covers a range of service industries, including health care, retail, and financial services. The index reached a five-year high of 59.7 in February, but has fallen since then.