The Purchasing Managers Index for non-manufacturing businesses has shown growth for 37 consecutive months. But the PMI slid from 55.7 to 55.2, indicating growth slowed.
Once the figure hits and then falls below 50, that indicates the service sector is breaking even and then contracting. Above 50 indicates growth.
The index for new orders also indicated growth slowing down. Although above 50 for the 42nd consecutive month, the index for new business orders fell from 58.3 to 54.4.
The Employment Index, which tracks the number of employees, rose for the sixth consecutive month and growth in employees picked up the pace, with the index rising from 56.3 to 57.5.
The prices index also showed faster expansion as the price index rose from 56.1 to 58.
The ISM said eight non-manufacturing industries reported growth in January while nine reported contractions.
The strongest growth was reported by agriculture, forestry, fishing and hunting, followed by management of companies and finance and professional services.
The sharpest declines were in entertainment and recreation; utilities; educational services and transportation and warehousing.