NEW YORK - The nation's service sector showed further expansion in November, but at a pace slower than the month before and below analysts' expectations.
The latest figures, released yesterday, provided more evidence that growth in the nation's economy has been cooling in the face of higher oil prices and a tighter credit market.
The Institute for Supply Management, a Tempe, Ariz., business group, said its index measuring performance in nonmanufacturing industries registered 54.1 in November, compared with 55.8 in October. Analysts surveyed by Thomson/IFR had projected a reading of 54.8 for last month.
A reading above 50 indicates expansion, while one below 50 shows contraction.
The November reading was the lowest since the index registered 52.4 in March. Employment and new orders grew at slower rates than in the previous month. Prices, meanwhile, rose at a faster rate.
Anthony Nieves, chairman of the institute's business survey committee, said in a statement accompanying the report that "the overall indication in November is continued economic growth in the nonmanufacturing sector, but at a slower pace than in October."
He said those surveyed were "concerned about the economy."
Separately yesterday, the Labor Department reported that worker productivity, the amount of output per hour of work, rose at an annual rate of 6.3 percent in the third quarter - the fastest pace in four years.
Also, the Commerce Department said orders to U.S. factories unexpectedly rose in October, although much of the gain reflected higher energy prices.
Keith Hembre, chief economist with First American Funds in Minneapolis, said the day's reports were consistent with projections that the U.S. economy was growing at a slower rate in the current quarter than in the July-to-September period. He estimated growth at an annual rate of 0.5 percent in the current quarter, down from 4.9 percent in the third quarter.
The weakness means the Federal Reserve "is likely to cut" interest rates further at its meeting next week, Hembre said.