ISM's Service Sector Index Grows Again In October

TALI ARBEL

NEW YORK (AP) — The U.S. service sector grew for a second straight month in October, but at a slower pace than in September, as a broad economic recovery creeps along.

The Institute for Supply Management said Wednesday that its service index dipped to 50.6 last month from 50.9. Any reading above 50 signals growth. Analysts polled by Thomson Reuters had expected a 51.5 for the index that tracks the country's hospitals, retailers, financial services companies and truckers.

But new orders, an augur of future activity, rose to 55.6, from 54.2 in September. Business activity also rose.

Still, the decline in employment worsened. The employment tracker has contracted for 21 of the past 22 months.

Meanwhile, the Federal Reserve pledged Wednesday to keep a key interest rate at a record low for an "extended period," and said economic activity has "continued to pick up" since its last meeting in late September.

But Fed Chairman Ben Bernanke and his colleagues warned that rising joblessness and hard-to-get-credit could hinder the rebound in the months ahead.