WASHINGTON — Service industries expanded in February at the slowest pace in four years, reflecting a plunge in hiring that shows the biggest part of the economy is struggling as harsher weather weighs on consumers and businesses.
The Institute for Supply Management’s nonmanufacturing index fell to 51.6 last month, lower than any forecast of economists surveyed by Bloomberg and the weakest since February 2010, the group said Wednesday. A gauge above 50 shows expansion. The median estimate in a Bloomberg survey of economists was 53.5.
Scant momentum in the pace of hiring, limited income gains, and rising mortgage rates are holding back consumers while unusually severe weather also limited retail sales and factory activity earlier this year. More progress in the housing market and faster job gains might be needed to propel the expansion in the first half of 2014.
‘‘The weather really affected a lot of the economic data throughout January and February,’’ said Thomas Simons, an economist at Jefferies in New York, whose forecast of 52 for the ISM gauge tied as the lowest in the Bloomberg survey. ‘‘It’s probably appropriate to have pretty muted expectations for payrolls this month,’’ especially considering that the survey week included the harshest conditions for the month, he said.
From July 2009, a month after the last recession ended, through January, the index averaged 53.9.
The report by the institute, which is based in Tempe, Ariz., covers industries that range from utilities and retail to health care, housing and finance, making up almost 90 percent of the economy.
The ISM’s employment gauge for nonmanufacturing industries slumped to 47.5, the weakest since March 2010, from 56.4. The 8.9 point drop was the biggest since November 2008 in the aftermath of the crash of Lehman Brothers.
The institute’s business activity index, a measure of confidence, declined to 54.6 from 56.3.
The rest of the data was more upbeat. The group’s measure of new orders increased to 51.3 last month from 50.9 in January.