WASHINGTON — U.S. service companies expanded in March at a slower pace, dragged down by less growth in new orders and weaker hiring.

The Institute for Supply Management says its index of non-manufacturing activity fell to 54.4 last month from 56 in February. Any reading above 50 signals expansion. March’s figure is the lowest in seven months.

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The report measures growth in industries that cover 90 percent of the work force, including retail, construction, health care and financial services.

Companies kept adding jobs, but at a reduced pace. A gauge of hiring fell 3.9 points to 53.3, the lowest since November. That is a negative sign for the government’s jobs report for March, to be released Friday.