August 3, 2007 10:30 AM, EDT

July ISM Services Index Declines Sharply

The economy’s service sector growth rate experienced its largest decline in nearly two years in July, falling to 55.8 in from 60.7 in June, the Institute for Supply Management said Friday.

Analysts’ had expected the index to drop to 59, Bloomberg reported.

The service index measures non-manufacturing components of the economy, and figures of more than 50 indicate expansion.

The June level was the highest in 14 months.

The services sector, which includes transportation, retail sales and financial services, accounts for nearly two-thirds of the U.S. gross domestic product.