The massive U.S. service sector expanded more slowly in February as hiring levels declined sharply, a research organization reported Wednesday, adding to a series of weaker-than-expected economic reports in recent weeks.
The Institute for Supply Management (ISM) said its service-sector index fell to 51.6 last month from 54 in January. Any reading above 50 reflects expansion of the sector, while a reading below 50 indicates contraction.
Unusually cold weather affected the February figures, as the real-estate, retail, hotel, food-services, and construction industries all shrank last month.
The ISM report’s measure of service-sector hiring plunged 8.9 points to 47.5, evidence that many companies cut workers. Still, the measures for new orders and production both pointed to continued growth in the sector that employs 90 percent of the U.S. workforce, including retail, construction, healthcare, and financial services.