US service sector growth slows for 2nd straight month

FILE- In this Sept. 30, 2020 file photo, waiter Lenworth Thompson serves lunch to David Zennario, left, and Alex Ecklin at Junior's Restaurant in New York. The U.S. services sector, where most Americans work, registered its fifth consecutive month of expansion in October 2020. (AP Photo/Mark Lennihan, File) (Copyright 2020 The Associated Press. All rights reserved)

SILVER SPRING, Md. – The U.S. services sector, where most Americans work, registered its sixth consecutive month of expansion in November.

The Institute for Supply Management reported Thursday that its index of services activity declined slightly to a reading of 55.9 last month, from a reading of 56.6 in October. Readings above 50 represent expansion in services industries such as restaurants and bars, retail stores and delivery companies.

Although broadly viewed as a good report, it was the second straight month that growth in the service sector slowed. That could be worrisome as COVID-19 infections rise and the weather turns colder.

Many restaurants, whose indoor capacities have been eliminated or reduced greatly, could be facing a make-or-break winter if fewer people take tables at the hastily assembled outdoor dining areas that popped up over the summer. A new surge in COVID-19 cases has already led many mandatory restaurant closures until case numbers decline.

But the U.S. is moving in the other direction.

On Wednesday, the U.S. recorded over 3,100 COVID-19 deaths in a single day, obliterating the record set last spring, while the number of Americans hospitalized with the virus eclipsed 100,000 for the first time. And new cases have begun topping 200,000 a day, according to figures released Thursday.

“While the recent string of positive vaccine news is encouraging, services, particularly consumer-facing firms, will not be on a stable footing until broad swathes of the population are immunized and the health crisis is fully over," analysts from Oxford Economics wrote in a note to clients.

Respondents to the November ISM survey were anxious about the current business climate.