Service Sector Expanded at Slower Pace Last Month

By CHRISTOPHER S. RUGABER | October 5, 2011 | 10:15 AM EDT

WASHINGTON (AP) — Service firms that employ 90 percent of the U.S. work force expanded at a slightly slower pace in September than the previous month. The report suggests the economy is growing but at a sluggish pace.

The Institute for Supply Management says its service sector index dipped to 53 from 53.3 in August. Any reading above 50 indicates expansion for the sector, which covers a range of businesses from restaurants and hotels to financial services firms and retailers.

A measure of employment fell below 50, suggesting firms cut staff last month.

The index reached a five-year high of 59.7 in February. It has weakened consistently since. In July, it fell to its lowest point level in 17 months.