Survey: Expansion by US services companies slowed in July

Businesses appear to be pulling back on investments despite signs of healthy demand from consumers and a reasonably solid jobs market.

"The recent strength of underlying retail sales can largely explain the resilience of service sector activity," said Andrew Hunter, U.S. economist at Capital Economics.

The ISM is a trade group of purchasing managers whose services survey covers businesses that employ the vast majority of workers, including retail, construction, health care and financial services companies.

Employees of private services companies hold 71 percent of American jobs (excluding farm workers), and services firms account for 94 percent of the 12.9 million jobs created since the recession ended in June 2009.