Growth at US service firms slows from 8-year high
Thursday, October 3, 2013
WASHINGTON (AP) — Growth at U.S. service companies slowed in September from an eight-year high in August, as sales fell sharply, new orders dipped and hiring weakened.
The Institute of Supply Management said Thursday that its service-sector index fell to 54.4 in September, down from 58.6 in August. August’s reading was the highest since December 2005. Any reading above 50 indicates expansion.
The sharp drop in sales suggests consumers and businesses pulled back on spending last month, which should keep growth weak. And the decline comes at a critical time when the government shutdown threatens to weigh on growth in the October-December quarter, if it goes beyond a week.
The services report measures growth in service industries, which cover 90 percent of the workforce, including retail, construction, health care and financial services.
The “index still points to moderate growth in the fourth quarter,” said Paul Ashworth, an economist at Capital Economics.
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