Contraction Slows in Services Sector

NEW YORK -- A private research group says the U.S. services sector contracted at a slower pace in December as new orders and employment improved.

The Institute for Supply Management, a trade group of purchasing executives, said Tuesday that its services sector index rose to 40.6 in December from 37.3 in November. Wall Street economists surveyed by Thomson Reuters had expected the index to slip slightly to 37.0.

The index continues to signal the sector is contracting. A reading below 50 signals contraction, while a reading above 50 indicates growth.