By John S. McClenahen The service sector of the U.S. economy, like the manufacturing sector, expanded in October at a rate that generally exceeded economists' expectations. The Institute of Supply Management's (ISM) index of non-manufacturing business activity was 64.7% last month, 1.4 percentage points higher than September's 63.3%. October was the seventh consecutive month that the Tempe, Ariz.-based group's non-manufacturing index has shown expansion. "In the non-manufacturing sector, 13 industry groups grew in October, while one contracted and three reported no change from September," notes ISM. A figure above 50% on the index indicates the non-manufacturing sector of the economy is expanding; a number below 50% signals it is contracting. Separately, the U.S. Commerce Department reported on Nov. 5 that total new orders for manufactured goods in September increased 0.5% to $331.1 billion. It was the fourth increase in five months, although the percentage of gain was below the 0.6% that economists anticipated. "However, orders for durables, particularly core non-defense capital-goods orders, were revised up," notes Maury Harris, chief U.S. economist at UBS Investment Research, New York. "The report thus underscores that the recovery has finally pierced the cyclical core of the economy -- the manufacturing sector. That development should alleviate fears that the U.S. expansion is not sustainable."