The service sector, which generates most U.S. jobs, expanded for the eighth consecutive month in August, but the pace of growth slowed, a private research group reported Friday. The Institute for Supply Management (ISM) said its service-sector index fell to 51.5 last month from 54.3 in July. Economists had expected a higher reading of 53.5. The August reading is the lowest since January. Levels above 50 indicate growth in the massive sector, while levels below 50 signify contraction. The index has shown service-company activity has expanded every month this year and it 10 of the past 12. But the expansion has not been as rapid as in the much smaller manufacturing sector, which has powered the U.S. recovery. Companies in the service sector, which include hospitals, shops, and banks, depend more on consumer spending. Consumers have limited spending as unemployment remains high, reaching 9.6 percent in August, and hiring has been slow because of uncertainty about the strength of the global economy in the coming months. Friday's ISM report provides another sign this summer than the recovery from the recession has slowed, making it difficult for employers to add back the millions of jobs lost during the slump. The service sector accounts for about 80 percent of U.S. jobs.
