Hiring slowed in the service sector, which accounts for about 80 percent of all jobs, including restaurants, banks, construction and agriculture. The gauge for hiring fell from 52 in July to 48.2 last month, a change of 2.7 percent.
Still, service companies added 67,000 jobs in August, according to a Labor Department report this morning, although the economy lost jobs an the unemployment rate rose to 9.6 percent.
The service sector is reliant on consumer spending, which accounts for 70 percent of the economy, and has been slowed by economic uncertainty.
The future outlook is unclear as ISM's gauge of new orders or expected future business slowed to its slowest pace of the year.
Some economists have argued though that orders tend to pick up at the end of the quarter and slow at the beginning.