Service sector expansion slows

The service sector’s expansion chugged along in August, although at a slightly slower pace than the record levels reached the previous month.

The Institute for Supply Management (ISM) said on Thursday that businesses remained optimistic even though the latest index showed a slight drop to 59 last month from 60.3 in July, when the sector posted its best showing since 2008.

{mosads}Any reading over 50 reflects expansion.

The index is a survey of a wide variety of businesses — the sector employs 90 percent of all workers, including those at restaurants, hotels and retailers.

Steady growth in the labor market is helping to boost spending and fuel the service sector’s expansion.

The August jobs report is set for release on Friday with economists anticipating that employers added 213,000 jobs last month with the unemployment rate dropping to 5.2 percent from 5.3.

The economy grew at a 3.7 percent pace in the April-June quarter after a slow start to the year.

A construction respondent reported that “business is good and do not see anything to slow it down.”

Retailers, meanwhile, said that “business and our market sector continue to be strong with continued growth and stability.”

The ISM’s business activity index decreased to 63.9 percent from 64.9 in July.

New orders slipped slightly to 63.4 percent in August from 63.8.

The employment index fell to 56 percent from July’s reading of 59.6 percent and reflects growth for the 18th consecutive month.