The manufacturing sector expanded in May for a tenth straight month but at a slower pace than in April while employment rose slightly to its best level in six years, according to an industry report released on Tuesday.

The Institute for Supply Management said its index of national factory activity slipped to 59.7 in May from 60.4 in April. The median forecast of 73 economists surveyed by Reuters was for a reading of 59.0. A reading above 50 indicates expansion in the sector.

The report's employment component rose to 59.8, the highest since May 2004, from 58.5, while new orders held steady at 65.7, suggesting slower growth in the euro zone has yet to have much effect on U.S. manufacturing.

(Reporting by Steven C. Johnson, Editing by Chizu Nomiyama)