The U.S. service sector, the nation's predominant job generator, expanded for the eighth straight month in August although the pace of growth slowed, according to a trade group survey.
The report released Friday provides another sign this summer that the recovery from the recession has slowed, making it difficult for employers to add back the millions of jobs lost during the downturn.
"Economic growth remains fragile," said Paul Ashworth, an economist at Capital Economics.
The Institute for Supply Management said its service-sector index fell to 51.5 last month from 54.3 in July. Economists had expected a higher reading of 53.5.
Levels above 50 signal growth. The index bottomed at 37.2 in November 2008.
The index shows service company activity has expanded every month this year, and in 10 of the past 12 months. But the expansion has not been as fast as in the much smaller manufacturing sector. Companies that supply services, which range from hospitals to shops and banks, depend more on spending by consumers in the U.S.
Shoppers have kept a tight lid on spending as unemployment remains high, hitting 9.6 percent in August, and hiring slow because of uncertainty about the strength of the global economy in the coming months.
In addition, the ISM survey's gauge of future business, new orders, slowed in August to the weakest pace this year.
A measure of managers' willingness to hire also shrank. This measure ticked higher for the first time in May after shrinking every month since December 2007, when the recession officially began. It has fluctuated between slight growth and slight contraction this summer.
The service sector accounts for about 80 percent of the nation's jobs.
