"There's a big question about Europe, big uncertainty about what will happen on the fiscal side in the U.S."
- Michael Carey, chief economist at Credit Agricole CIB
U.S. service sector expanded in May, a sign the largest part of the U.S. economy is weathering the debt crisis in Europe. The Institute for Supply Management's non-manufacturing index rose to 53.7 last month from 53.5 in April, said the group on Tuesday. Reading above 50.0 indicates industry expansion.
"Caution is going to remain with us," said Michael Carey, chief economist for North America at Credit Agricole CIB in New York.
"There's a big question about Europe, big uncertainty about what will happen on the fiscal side in the U.S., and the uncertainty is holding back robust growth."
"Overall, the data held up but is still at a low level, and I do not think this counters the significantly weak data we have been seeing," said Tom Porcelli, chief economist at RBC Capital Markets in New York.
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