US services sector index drops, misses estimates

Growth in the U.S. services sector slowed in February, coming in below forecasts as the employment index fell into contractionary territory for the first time in more than two years, according to data released Wednesday.

The Institute for Supply Management said its services sector index fell to 51.6 last month, its worst read since February 2010 as bad weather impacted business activity.

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The results were below January's 54, as well as analyst expectations for 53.5.

February marked the 50th straight month the index was above 50, the level that separates expansion and contraction, though the pace of growth was well below the seven-year high of 57.9 hit in August.

The employment index dropped in February to 47.5 from 56.4, falling below 50 for the first time since December 2011. It was the lowest read for the subindex since March 2010.

The gauge of business activity fell to 54.6 from 56.3 in January and was below expectations for a read of 55.1. On a positive note, the new orders index rose to 51.3 in February from 50.9 in January.