Service Sector Expands at Slowest Pace in Four Years

An index of the U.S. economy’s service sector increased in February at the slowest pace in four years, the Institute for Supply Management reported March 5.

ISM’s monthly services index declined to a 51.6 reading, the weakest since February 2010, from 54 in January. Figures of more than 50 indicate expansion, and figures below that show contraction.

The reading was below economists’ median forecast of 53.5, Bloomberg News reported. Estimates ranged from 52 to 55.

“There’s a moderate underlying growth, but it’s being slowed a bit by the bad weather,” David Sloan, senior economist at 4Cast Inc. told Bloomberg.

The index has averaged 53.9 since the recession ended in June 2009, Bloomberg reported.

ISM’s services index measures nonmanufacturing components. The services sector, which includes transportation, retail sales and financial services, accounts for nearly 90% of the U.S. gross domestic product.