WASHINGTON – U.S. service companies expanded more slowly in February as hiring levels declined in a cautionary sign for the economy coming out of the winter.
The Institute for Supply Management says its service-sector index fell to 51.6 from 54 in January. Any reading above 50 indicates expansion.
But the harsh winter weather posed challenges. The real estate, retail, hotel, food services and construction industries all contracted last month.
A measure for hiring plunged 8.9 percentage points to 47.5, evidence that many companies shed workers. Still, measures for new orders and production both point to continued growth.
The survey covers businesses that employ 90 percent of the workforce, including retail, construction, health care and financial services firms.