The pace of growth in the vast services sector slowed in March to the lowest level in seven months as new orders and employment measures pulled back, an industry report showed on Wednesday.

The Institute for Supply Management said its services index fell to 54.4 last month from 56 in February, falling short of economists' forecasts for 55.8. It was the weakest reading since August.

A reading above 50 indicates expansion in the sector.

The forward-looking new orders index slipped to 54.6 from 58.2, while employment dropped to its lowest level since November at 53.3 from 57.2.

(Reporting by Leah Schnurr; Editing by Chizu Nomiyama)