NEW YORK (CNN/Money) - Service sector activity in the United States expanded again in July the nation's purchasing managers said Monday, though the biggest industry in the world's biggest economy lost some strength.

The Institute for Supply Management (ISM) said its index of non-manufacturing business activity fell to 53.1 in July from 57.2 in June. Economists expected an index reading of 55.0, according to Briefing.com. Any reading above 50 indicates growth in the sector.

It was the sixth straight month of growth in non-manufacturing industries, which make up $4.3 trillion of the $10.4 trillion U.S. economy and provide 82 percent of all U.S. jobs.

But July also marked the second straight month that the sector grew at a slower pace, raising questions about the strength of the broader economy's recovery from a recession that began in March 2001.

Those questions helped drive U.S. stock prices lower, while Treasury bond prices rose.

The ISM's report last week on manufacturing activity showed growth in that sector was barely positive in July. Taken with Wednesday's report of weaker-than-expected gross domestic product (GDP) growth last year and in the first quarters of this year and Friday's anemic report on the labor market, economists have begun to worry more about the prospect that the economy could slip back into recession.

While a majority of economists say a so-called "double-dip" back into recession is unlikely, fears about it could prove a self-fulfilling prophecy, if they cause businesses to cut back on their spending and hiring in anticipation of further economic weakness.

In its report Monday, the ISM quoted one of the more than 370 business executives it surveyed as saying, "While the economy continues to show signs of improvement, overall outlook remains cautious through year-end."

The ISM's new orders index fell to 52.6 from 56.9 in June. The employment index rose to 45.8 from 44.3 in June, staying below 50 for the 17th straight month, which indicates that jobs were still cut, although at a slower pace.