The Institute for Supply Management's services index slipped to 52.4 in March from February’s reading of 54.3, ISM said Wednesday.
The index measures non-manufacturing components of the economy. Figures of more than 50 indicate expansion.
Analysts’ had expected the index to rise to a reading of 55, Bloomberg reported.
The services sector, which includes transportation, retail sales and financial services, accounts for nearly two-thirds of the U.S. gross domestic product.