The massive U.S. service sector expanded more slowly in October, but at a pace of growth that still was healthy, while hiring rose to the fastest pace in more than nine years, an industry group reported Wednesday. The Institute for Supply Management (ISM) said its service-sector index fell to 57.1 last month from 58.6 in September. It was the second consecutive drop after the index had risen steadily since February to 59.6 in August, the highest level in eight years. Any reading above 50 indicates expansion in the sector that covers businesses that employ 90 percent of the U.S. workforce, including retail, construction, healthcare, and financial services. A reading below 50 signifies contraction. Steady hiring this year means more Americans are earning paychecks, which supports spending at retail stores, hotels, and other service companies. The data Wednesday indicates that growth among service firms is cooling somewhat after rapid expansion earlier this year. The ISM gauge of service-sector hiring rose to 59.6, the highest reading since 2005, suggesting that Friday's U.S. government report on job creation and unemployment could show another strong gain. However, there were other signs that growth in the service sector may have reached a plateau after accelerating for most of this year. The ISM gauge of new orders fell almost 2 points to 59.1, and a measure of order backlogs also fell. "The majority of the respondents' comments reflect favorable business conditions," said ISM services index chair Anthony Nieves. "However, there is an indication that there continues to be a leveling off from the strong rate of growth of the preceding months."
