(Corrects 2nd paragraph to service sector from 'national factory' activity)

The U.S. non-manufacturing sector grew in June for a sixth straight month but the rate of growth slowed more than expected and hit its lowest since February, according to an industry report released on Tuesday.

The Institute for Supply Management said its index of service sector activity fell to 53.8 from 55.4 in May, The median forecast of 72 economists surveyed by Reuters was for a reading of 55.

A reading below 50 indicates contraction in the manufacturing sector, while a number above 50 means expansion.

The report's employment component fell to 49.7 from 50.4, falling back into contractionary territory after turning positive last month and confirming weak reports on the labor market.

New orders also fell, to 54.4 from 57.1, suggesting growth may be moderating, while export orders turned negative..

(Reporting by Edward Krudy; Editing by James Dalgleish)