Slow growth in April for service sector

WASHINGTON – The U.S economy’s service sector grew last month at the slowest pace since August. The report renewed concerns that more expensive gas and food may be weakening growth.

Service companies, which employ 90 percent of the nation’s work force, still expanded for the 17th straight month. But their growth slowed considerably because of a sharp drop in demand for their services, the Institute for Supply Management said Wednesday.

The private trade group of purchasing executives said its index of service-sector activity dropped to 52.8 last month. That’s down from 57.3 in March and a five-year high of 59.7 in February. Any reading over 50 indicates expansion.

The trade group measures activity for a range of industries, including retail, health care, financial services and construction. The index plummeted to 37.6 in November 2008, at the height of the financial crisis. The sector contracted for all but three months in 2009.

Many companies and economists said the decline in April reflects the impact of rising gas and food prices.

The spike in costs for basic necessities has left consumers with less money to spend elsewhere. One result has been a decline in demand for services. The service sector’s measure of new orders plummeted to its lowest level since December 2009.