Service sector continues decline
Purchasing managers report that its non-manufacturing index is down in February, but the fall was less than expected.
NEW YORK (CNNMoney.com) -- Service sector activity worsened in February, remaining weak amid an economy in recession, a purchasing managers' group said Wednesday.
The Institute for Supply Management's non-manufacturing index fell 1.3 percentage points to 41.6 in February from the month prior. Economists predicted the index would fall to 41.0, according to a Briefing.com consensus survey.
The index is considered both an indicator of the sector's performance and a measure of the economy as a whole.
Index readings above 50 are considered to indicate growth while levels below 50 signal contraction.
The index is off its record low of 37.4, which was set in November. Also positive was that the employment index, traditionally a weak part of the report, rose to 37.3 from 34.4 in January.
Still, only one sector - the arts, entertainment and recreation industry - reported growth in February. The 14 other industries tracked contracted, with the biggest declines in wholesale trade, management of companies, and mining.
Joshua Shapiro, an economist at Maria Fiorini Ramirez Inc., said that even though the index has improved from the free fall that existed late last year, little has improved.
The level of the overall index is "consistent with a serious recession, and we do not expect sustained improvement in the months immediately ahead," Shapiro wrote in a note.
Economists expect the government's non-farm payroll report, which is due out on Friday, to show that 650,000 jobs were lost in the month of February.
On Monday, the ISM manufacturing index rose unexpectedly, but it still indicated contraction within the sector. 
