U.S. economy grows at slowest pace in five months, S&P says. Inflation ‘sticky.’

Most Americans are employed on the service side of the economy in areas such as high-tech, health care, finance and hospitality.

The S&P U.S. manufacturing sector index, meanwhile, rose to 49.0 from 46.3, but it’s been negative for months.

The S&P Global surveys are among the first indicators each month to assess the health of the economy. Any number above 50 points to expansion. Figures below that signal contraction.

The rate of inflation, meanwhile, eased a bit, but companies continued to face intense price pressures, especially on the cost of labor.

“The stickiness of price pressures meanwhile remains a major concern,” said chief business economist Chris Williamson of S&P Global. “[F]urther falls in the rate of inflation below 3% may prove elusive in the near term.”

Big picture: The large service side of the economy is keeping the U.S. forging ahead, but it might be losing some steam. The Federal Reserve is expected to raise interest rates again this week and higher borrowing costs have trimmed the sails of the economy.

Manufacturers, for their part, are lagging well behind and arguably are already in a recession of sorts.

Not just in the U.S., either. Manufacturers are struggling even more in Europe and other parts of the world as consumers shift spending to services from goods.

Read: Eurozone Economy Contracts Further in July, PMIs Suggest

A recession appears far off, however. A new survey of business economists shows that 71% think a U.S. downturn is at least a year away.

Market reaction: The Dow Jones Industrial Average
DJIA,
+0.45%
and S&P 500
SPX,
+0.33%
rose in Monday trades.