NEW YORK – The pace of growth in the U.S. service sector eased slightly more than expected in November, with prices paid decreasing and employment picking up, a report published on Monday showed.
The Institute for Supply Management's services index eased to 58.5 in November from 60.0 in October, just below Wall Street's median forecast of 59.0.
A number above 50 indicates growth in the sector, which accounts for roughly 80 percent of U.S. economic activity and includes businesses like restaurants, hotels, hair salons, banks and airlines.
November marked the 32nd consecutive month of growth in U.S. services, ISM said in a statement.
The jobs component of the survey rose to 57.0 from 52.9, which analysts said reflected the relative strength of the U.S. November non-farm payrolls report released on Friday.
"The service sector of the economy is still growing at a good pace and that is consistent with what we were seeing in the employment report for November," said Patrick Fearon, senior economist at A.G. Edwards and Sons in St. Louis, Missouri.
The payrolls report on Friday showed the U.S. economy created 215,000 jobs last month, just above expectations and well up from a revised 44,000 in October.
"Companies are willing to hire more people because they have confidence that at least in the near future, business will be strong," said Ralph Kauffman, chair of the ISM Non-Manufacturing Business Survey Committee.
Within the survey, the new orders index rose to 59.5 from 58.2, while the prices-paid index eased to 74.2 from 78.0.
"Even though the index has been going down, prices are at pretty high levels," Kauffman said. "It appears that the recent drop-off in oil prices in particular is probably behind the drop this month, but the list of commodities that are up in price is a pretty long list and it's pretty broad."
The Federal Reserve has repeatedly said it will take action to stifle any signs of U.S. price inflation. The Fed is generally expected to raise official U.S. interest rates at its next two policy meetings in December and January.