U.S. service sector activity cools in August

U.S. service sector registered the lowest expansion pace in more than six years in August, an industry survey showed on Tuesday.

The Non-Manufacturing Index (NMI), which measures activity in the U.S. service sector, registered 51.4 in August, down 4.1 points from July' s reading, the Institute for Supply Management (ISM) said in its monthly survey.

The NMI survey covers all sectors outside of manufacturing. A reading above 50 percent indicates expansion of the service sector.

The business activity index decreased substantially to 51.8 from July reading of 59.3; the new orders component of the index, a signal of future business, dropped 8.9 points to 51.4; the component of employment decreased 0.7 point to 50.7.

Eleven industries tracked by the ISM reported growth while seven industries reported contraction in the month.

The survey showed that majority of the respondents saw a slowing in the level of business.

An ISM report released earlier this month showed that the U.S. manufacturing sector contracted in August, raising concern over whether the economy can have a strong rebound in the third quarter after a modest growth of about 1 percent in the first half of this year. Enditem