WASHINGTON – The service sector, which makes up 80 percent of the economy, grew for the seventh month in a row in July, a private trade group said Wednesday. State aid to preserve the jobs of tens of thousands of teachers and other public employees also cleared a key hurdle in Congress.

The job market still has a long way to go, however. A key employment report due out Friday is expected to show the nation actually lost jobs in July, mostly because of temporary census work that came to an end.

“The good news is that the economy is still moving forward, but the bad news is that it is moving at a fairly moderate rate,” said Sal Guatieri, senior economist at BMO Capital Markets. “At least we have enough underlying strength in the economy to keep pushing us forward.”

The private Institute for Supply Management reported that the nation’s broad service sector expanded in July. The ISM index, which covers everything from homebuilders to medical transcriptionists to Google, rose to 54.3.

A reading of 50 or higher signals growth, and it hasn’t been below that threshold since 2009. June’s reading was 53.8, and economists were expecting a drop to 53 for July.

The service sector depends heavily on consumer spending, and that has been weak since the recession began in 2007. Americans are saving more, a trend that the latest government reports confirmed this week.

Economists also saw positive news on Capitol Hill on Wednesday. The Senate overcame a Republican filibuster and was poised to pass a $26 billion aid package to help states and local school boards cope with their budget problems.

The measure and an extension of long-term jobless benefits that was approved last month would help sustain the recovery, economists said. But they don’t expect any real change until employers start hiring at a faster pace.

Many companies remain wary. The businesses responding to ISM’s survey showed “cautious optimism about business conditions,” said Anthony Nieves, who oversees the ISM’s service sector survey.