WASHINGTON – Growth at U.S. service companies slowed slightly in January behind weaker new orders and business activity. But hiring improved, a bright sign for the economy.

The Institute for Supply Management said Tuesday that its index of non-manufacturing activity dipped to 55.2 in January. That's down from 55.7 in December, which was the highest level in nearly a year. Any reading above 50 indicates expansion.

The modest decline from December's strong reading suggests the industry was not greatly hampered by an increase in Social Security taxes that reduced take-home pay for most Americans.