WASHINGTON (AP) — U.S. service sector firms grew in November at the weakest pace since June, evidence that cautious spending by consumers and businesses may be slowing growth.
The Institute for Supply Management said Wednesday its service-sector index fell to 53.9 in November, down from 55.4 in October. Any reading above 50 indicates expansion. The index hit an eight-year high of 58.6 in August.
A measure of sales fell sharply last month to 55.5 from 59.7. While that is still above 50, the decline suggests consumers were more reluctant to spend than they were earlier this year. The sales figure reached 62.2 in August.
And a gauge of hiring fell to the lowest level since May. That's a sign job gains may have slowed in November. The government will report last month's hiring figures on Friday.
Economists weren't overly concerned by the declines. They noted that the level of the index still points to steady growth. The government's report on gross domestic product, the broadest measure of goods and services, will be released Thursday.
"The fall ... is a bit disappointing, but the survey is still consistent with decent GDP and jobs growth in the fourth quarter," said Paul Dales, an economist at Capital Economics.
Eleven of the 17 industries tracked by the survey expanded last month, including transportation and warehousing, retail, and finance. Six contracted, including mining, restaurants and hotels and construction.
Growth in the service industry has been steady this year. The ISM's index has averaged 55 over the past 12 months.
The survey covers businesses that employ 90 percent of the workforce, including retail, construction, health care and financial services firms. Nearly 86 percent of job gains in the past three months have been in the service sector.