Service sector growth better than expected in May

NEW YORK -- A private trade group says the service sector grew at a better-than-expected pace in May, as business at hotels, educational services and health care expanded modestly for the second month in a row.

The sector's performance may provide some hope that the current U.S. economic slowdown will not be too severe.

The Institute for Supply Management said Wednesday its service sector index was 51.7 in May, following a better-than-expected reading of 52 for April. Wall Street economists had been expecting a reading of 50.3 in May.

A reading above 50 indicates the sector is growing, while a reading below 50 indicates contraction.