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U.S. service sector activity picks up steam

A cashier receives payment for purchases from a customer at Macy's at Herald Square in New York.

ERIC THAYER/REUTERS

The pace of growth in the vast U.S. services sector picked up in September as new orders accelerated, though employment cooled, an industry report showed on Wednesday.

The Institute for Supply Management said its services index rose to 55.1 from 53.7 in August, surpassing economists' forecasts for a slight decrease to 53.2, according to a Reuters survey.

A reading above 50 indicates expansion in the sector.

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The forward-looking new orders index jumped to 57.7 from 53.7, but growth in employment eased to 51.1 from 53.8. Exports also waned to 50.5 from 52.

Services firms - which range from agriculture to real estate companies - avoided the contraction that hit their manufacturing counterparts over the summer.

The resiliency was also in contrast to data from abroad, which showed the decline in euro zone companies deepened last month, while China's services sector weakened to nearly a two-year low.

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