ISM Services Index Falls to 55.8 from 60.7

" Growth in U.S. service industries slowed more than forecast in July, a sign businesses that make up most of the economy may be contributing less to the expansion in the second half.

The Institute for Supply Management's index of non- manufacturing businesses, including banks, builders and retailers fell to 55.8 last month, from 60.7 in June, the biggest drop in almost two years, the Tempe, Arizona-based group said today. Readings above 50 point to growth.

Weakening consumer demand, the prospect of increased limits on borrowing and evidence of slower economic growth are leading companies to hold off on their own spending and expansion. Payrolls grew less than expected last month, and the unemployment rate rose, the Labor Department said in an earlier report today. "

Source: U.S. ISM Services Index Falls More Than Forecast (Update2) (http://www.bloomberg.com/apps/news?pid=20601068&sid=asw3e3pfTRVA&refer=economy)