ISM Services Index Contracts

The U.S. economy’s service sector contracted last month, the Institute for Supply Management said Thursday.

ISM’s monthly services index fell to a 48.7 reading, from 50.6 in October, ISM said in its monthly report. October’s had been the second consecutive services index expansion after 11 months of contraction.

Figures of more than 50 indicate expansion, while below that shows contraction. Economists had forecast an increase to a 51.5 reading, Bloomberg reported.

The new orders index, an indicator of future activity, fell to 55.1 from 55.6 the prior month.

ISM’s services index measures non-manufacturing components of the economy, and the services sector, which includes transportation, retail sales and financial services, accounts for nearly two-thirds of the U.S. gross domestic product.