|CHRISTOPHER S. RUGABER, AP Economics Writer|
The report measures growth in a broad range of businesses from retail and construction companies to health care and financial services firms. The industries covered employ about 90 percent of the work force.
A gauge of hiring rose to a seven-month high of 54.9. The government said Friday that services firms added 163,000 net jobs in October. It was the best showing since February and represented 95 percent of the jobs created last month.
October's ISM reading matched the 12-month average for the index. Overall, 13 industries reported growth and five contracted. The industries reporting the fastest growth were agriculture, construction, management of companies, and finance and insurance; those showing the most contraction were mining and arts and entertainment.
A measure of current sales fell to 55.4 after jumping to 59.9 in September. New orders fell, partly because of a decline in export orders. That reflects
Economists said the report still shows there is some momentum in the service sector. October's reading is above the July-September average of 53.8.
"The tentative indication … is that growth may well be improving,"
The ISM reported last week that manufacturing expanded for a second straight month in October. The sector had contracted from June through August.
Superstorm Sandy could drag on growth in the final three months of the year, economists noted. Still, most expect the impact to be temporary. Hiring and growth should pick up again early next year when homes and businesses damaged by the storm are rebuilt or repaired, they said.
The storm had no impact on Monday's report, the ISM said, because the survey was completed before it made landfall.
Employers added 171,000 jobs in October and hiring was also stronger in August and September than first thought, the government said Friday. The unemployment rate rose to 7.9 percent from 7.8 percent in September. The increase mainly reflected the fact that many more people began looking for work last month and not all of them found jobs.
Service companies have been a key source of job growth this year. They have created about 90 percent of the net jobs added since January. Still, many of the new service jobs have been low-paying retail and restaurant positions.
The unemployment report was the last major snapshot of the economy before Tuesday's elections.
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