NEW YORK, Feb 4 (Reuters) - The U.S. service sector shrank in January, but less severely than expected, according to a report released on Wednesday.
The Institute for Supply Management said its non-manufacturing index came in at 42.9 in January compared with 40.1 in December.
The level of 50 separates expansion from contraction. The index dates back to July 1997.
Economists had expected a reading of 39.0, according to the median of 75 forecasts in a Reuters poll, which ranged from 37.0 to 44.0.
The service sector represents about 80 percent of U.S. economic activity, including businesses such as banks, airlines, hotels and restaurants. (Reporting by Burton Frierson; Editing by James Dalgleish)