The mammoth U.S. services industry (search) recovered in October from a post-hurricane slide but high energy costs still dragged, a report showed Thursday.

The Institute for Supply Management's (search) services index rose to 60.0 in October from 53.3 in September, beating Wall Street's median forecast for a rise to 57.0.

A number above 50 indicates growth in the sector, which expanded for the 31st straight month after Hurricanes Katrina and Rita (search) slammed the U.S. Gulf Coast in August and September.

"Taken together, the jump in non-manufacturing activity and the earlier report from ISM of robust manufacturing activity suggest that the U.S. economy will probably transcend the latest energy price shock, and then some," said John Lonski, chief economist at Moody's Investors Service.

The U.S. service sector is the largest in the world, accounts for roughly 80 percent of nationwide economic activity, and includes anything from hotels and restaurants to insurance and healthcare services.

The survey's prices-paid index dropped to 78.0 from 81.4 in September, while new orders rose to 58.2 from 56.6.

"Concern about the continued high level of energy prices and its impact on economic activity is again the number one topic on which survey respondents commented," said Ralph Kauffman, chair of the ISM Non-Manufacturing Business Survey Committee.

Kauffman said respondents also commented on the hurricanes and their impact on energy supply and the availability and cost of building materials and trucking.

However, the survey's jobs component fell to 52.9 from 54.9, suggesting the service sector has yet to fully recover from the storms' impact.

"There's a need for improvement. Employment has given back ground from the summer average of 57.7," said John Herrman, director of economic commentary for Cantor Viewpoint, who said the report was otherwise a "very strong, solid reading." REUTERS