The U.S. service sector grew slightly in June yet at its slowest pace since July 2012, according to a new report released Wednesday. It also fell to a three-year low.

The Institute for Supply Management (ISM) says that its Non-Manufacturing Index (NMI) registered 52.2 percent in June, 1.5 percentage points lower than the 53.7 percent registered in May. This slight decrease still indicates continued growth in the non-manufacturing sector.

Yet June's 52.2 percent level is lower than what analysts were anticipating. The consensus among analysts polled by Briefing.com expected, on average, that June's NMI would be 54.0 following May's level of 53.7.

Still, any mark above 50 indicates that the sector expanded, in this case for the 42nd consecutive month.

June's readings were based on key indexes of the report. The Business Activity Index registered 51.7 percent, which is 4.8 percentage points lower than the 56.5 percent reported in May, reflecting growth for the 47th consecutive month.

The New Orders Index decreased by 5.2 percentage points to 50.8 percent, and the Employment Index increased 4.6 percentage points to 54.7 percent, indicating growth in employment for the 11th consecutive month.

The Prices Index increased 1.4 percentage points to 52.5 percent, indicating prices increased at a faster rate in June when compared to May. According to the NMI™, 14 non-manufacturing industries reported growth in June.

"The Employment Index increased 4.6 percentage points to 54.7 percent," said Anthony Nieves, chair of the Institute for Supply Management, "indicating growth in employment for the 11th consecutive month." Purchasing managers are considered to have current and relevant insight into a company's view of the economy.

The report, based on a survey of about 400 purchasing managers in non-manufacturing industries, measures business conditions such as employment, production, new orders, prices, supplier deliveries, and inventories. It is a leading indicator of economic health, as businesses react quickly to market conditions.