The Institute for Supply Management said Wednesday its service index dipped to 50.6 last month from 50.9. Any reading above 50 signals growth, but analysts polled by Thomson Reuters had expected a 51.5.

But new orders, a gauge of future activity, grew faster in October: 55.6, from 54.2 in September.

Still, the decline in employment worsened. The employment tracker has contracted for 21 of the past 22 months.

In the ISM's survey, nine industries said their businesses grew last month, with real estate, construction, corporate management and support services showing the biggest gains. Seven sectors contracted.

The services sector represents about 80% of U.S. economic activity, including businesses such as banks, airlines, hotels and restaurants.

Contributing: Reuters