Service-sector firms push through government shutdown

The service sector barreled through the government shutdown, growing at a faster rate in October.

An increase in sales and hiring boosted the Institute of Supply Management's index to 55.4 in October, up from 54.4 in September, according to a Tuesday report. 

Any reading above 50 reflects growth.

The August figure was the best showing since December 2005. 

Last week, manufacturers reported the fastest growth in 2 1/2 years. 

Combined, the reports signal that the private sector is maintaining steady growth and that the 16-day government shutdown did little to push it off course. 

The sector employs 90 percent of all workers, including those at restaurants, hotels and retailers and its fluctuations can signal whether consumers and businesses will increase or pull back their spending. 

Most of the consternation of the shutdown came from hotels, restaurants and retail, all of which complained about declines in business while the government was closed. 

The gauge of sales rose 4.6 points to 59.7 in October. 

Meanwhile, hiring jumped 3.5 points to 56.2, which suggests firms added more jobs last month. 

Still, a separate report from the ADP reflected an across-the-board slowdown last month as employment increased by only 130,000 jobs in October, slower than the average. 

New orders and exports dropped, the report showed. 

The government's October employment report will be released Friday and the estimates are ranging between 100,000 and 125,000 with the unemployment rate expected to rise to 7.3 percent. The September report reflected jobs growth of 148,000.

The October report is a week late because of the shutdown.

Third quarter growth numbers are due out on Thursday with those estimates coming in at around 2 percent.

Economic data from the government shutdown could take a couple of months to shake out before a better assessment is available.