FILE PHOTO: An employee routinely sanitizes server trays at a reopened restaurant after restrictions to prevent the spread of coronavirus disease (COVID-19) are eased in Bloomfield Hills, Michigan, USA, 8 of June 2020. REUTERS / Emily Elconin / File Photo
WASHINGTON (Reuters) – Activity in the US service industry rebounded sharply in June, nearly returning to its pre-COVID-19 pandemic levels, but a resurgence in coronavirus cases that has forced some restaurants and bars threatens emerging recovery.
The Institute for Supply Management (ISM) said Monday its non-manufacturing activity index rose to a reading of 57.1 last month, the highest since February, from 45.4 in May. It recovered from a reading of 41.8 in April, which was the lowest since March 2009.
A reading above 50 indicates growth in the service sector, which represents more than two thirds of the economic activity of the United States. Economists polled by Reuters had forecast the index would rise to a reading of 48.9 in June.
The report followed an ISM manufacturing survey last week that showed the factory’s activity rebounded to a 14-month high in June. However, optimistic polls have been overshadowed by furious COVID-19 cases in large parts of the country, including densely populated California, Florida, and Texas.
The crisis in the cases that started in late June has led several states to reduce or pause reopens, hitting restaurants and bars hard.
The ISM survey measure of new orders for the service industry increased to a reading of 61.6 in June from 41.9 in the previous month. There was an increase in export orders, and backorders increased.
The survey’s service industry employment index rose to a reading of 43.1 last month from 31.8 in May.
Although this measure hit 30.0 in April, a level last seen in 1997, it disagreed with a report last Friday showing the rise in nonfarm payrolls to a record 4.8 million jobs in June. The services sector represented 4,263 million of jobs.
Reports by Lucia Mutikani; Editing by Chizu Nomiyama
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