The US service sector contracted in February, but not as badly as economists had expected.
The Institute for Supply Management's index of activity came in at 49.3, above the record low result of 44.6 in January but still slightly below the level of 50 that separates expansion from contraction.
Separate figures showed that US productivity was slightly better than earlier estimated in the fourth quarter but labour costs were also considerably higher, presenting an inflation dilemma for the Federal Reserve, which has cut interest rates aggressively to shore up the economy.
Another report from ADP Employer Services showed a fall of 23,000 private sector jobs in February, compared with a downwardly revised 119,000 jobs added in January.
February's fall was the first in private employment since June 2003 and the biggest drop since April 2003.
