U.S. service industries expanded in September at the slowest pace in six months, a sign the housing recession is weighing on some parts of the economy without stopping their growth.

The Institute for Supply Management's index of non- manufacturing businesses, which make up almost 90 percent of the economy, fell to 54.8 from 55.8 the prior month, said the group, based in Tempe, Ariz. Readings above 50 signal growth.

Meanwhile, job cuts announced by U.S. employers fell 29 percent (to 71,739 last month from 100,315 in September 2006) reflecting fewer firings by automakers and parts suppliers, according to a report by Chicago private placement firm Challenger, Gray & Christmas Inc.