US service-sector growth accelerates

Growth in the massive U.S. service sector accelerated in October as companies added workers despite a federal government shutdown, but new-order growth slowed for a second consecutive month, according to an industry report Tuesday. The Institute for Supply Management (ISM) said its index of service-sector activity rose 1 point to 55.4 last month. Economists had expected a modest decline. In the ISM survey, any reading above 50 indicates expansion of the sector, while a reading below 50 signifies contraction. While the October reading was below the almost eight-year high of 58.6 seen in August, it was notable for having climbed despite a political impasse in Washington that forced a partial government shutdown for the first half of October. The ISM survey’s employment index rose sharply to 56.2, nearing the six-month peak hit in August. But the forward-looking new-orders component fell for a second consecutive month, dropping to 56.8 from 59.6 in September. The service sector employs 90 percent of U.S. workers and includes retail, construction, hospitality and leisure, and financial services.