A key measure of the strength of the U.S. manufacturing sector revealed that growth in new orders and employment retreated in May, but industrial costs jumped.

According to data published on Thursday by the Institute for Supply Management, the index of national factory activity moderated to 54.4% in May from 57.3% in April, short of economists’ median forecast of 55.5%.

A reading above 50 indicates growth in the factory sector and the ISM index has held above this level for about three years in a row now.

The prices paid index, which measures inflationary pressures within the factory sector, spiked to 77% from 71.5%.

The new orders component, a gauge of future growth, receded to 53.7% from 57.6% while the employment index fell to 52.9% from 55.8%.