US service-sector business activity picked up in October and firms took on workers despite a partial government shutdown, but new order growth slowed for a second straight month, an industry report has shown.

The Institute for Supply Management said its services index rose a point to 55.4 last month.

Economists had expected it to slip to 54.0. A reading above 50 indicates expansion

While last month's reading was below the near eight-year high of 58.6 reached in August, it was notable for having climbed despite a political standoff in Washington that forced a partial government shutdown for the first 16 days of October.

The employment index rose to 56.2, bringing it closer to the six-month peak hit in August. It slipped to 52.7 in September.

However the forward-looking new orders component fell for a second month running, checking in at 56.8 in October from 59.6 the prior month.

The data comes days after the ISM's national factory index showed US manufacturing grew at its fastest pace last month in 2-1/2 years.

Overall, however, recent US economic data has been mixed, and growth is expected to have slowed to a 1.9% rate in the third quarter from 2.5% between April and June.

The Federal Reserve has said the timing of a decision to begin scaling back support for the US economy will depend on the way the economy evolves.