Economic activity in the U.S. service sector contracted in October following two months of growth, according to the Institute for Supply Management. The organization's nonmanufacturing index fell to a reading of 44.4 in October from 50.2 in September. Readings above 50 indicate expansion.

The reading on the employment portion of the index fell to 41.5 in October from 44.2 in September.

The report is based on a survey of purchasing and supply executives across the country.