Services in U.S. Expand at Slowest Pace Since 2010: Economy

Dec. 5 (Bloomberg) — Service industries in the U.S. expanded in November at the slowest pace since January 2010 as employment cooled, a sign improvement in the biggest part of the economy will be uneven.

The Institute for Supply Management’s non-manufacturing index unexpectedly fell to 52 last month from 52.9 in October, the Tempe, Arizona based-group said today. The median forecast in a Bloomberg News survey called for a gain to 53.9. Fifty is the dividing line between expansion and contraction.

Falling home prices, slow wage growth and limited job gains may make it difficult for households to sustain the pace of spending after the holiday shopping season. For companies, Europe’s debt crisis and a lack of clarity on the U.S. budget deficit and taxes remain obstacles to investment and hiring.

“The economy continues to muddle along at a moderate pace,” said Richard DeKaser, deputy chief economist at Parthenon Group Inc. in Boston, who projected a reading of 51.5. “The economic fundamentals are reasonably strong but are being stymied by the elevated uncertainty.”

Stocks rose, adding to the best weekly gain since 2009, as Germany and France pushed for a new European Union treaty to combat the debt crisis. The Standard & Poor’s 500 Index climbed 1 percent to 1,257.08 at the close in New York.

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