U.S. service sector slowed its expansion in October after a strong rebound in September, an industry survey showed on Thursday.

The Non-Manufacturing Index (NMI), which measures activity in the U.S. service sector, registered 54.8 in October, down 2.3 points from September's reading, the Institute for Supply Management (ISM) said in its monthly survey.

The NMI survey covers all sectors outside of manufacturing. A reading above 50 percent indicates expansion of the service sector.

The business activity index dropped 2.6 points to 57.7; the new orders component of the index, a signal of future business, fell 2.3 points to 57.7; the component of employment decreased 4.1 points to 53.1.

The slowdown in service sector indicated that the strong expansion in September was not sustainable, said the ISM. In September, the NMI rose 5.7 points to a 12-month high of 57.1.

The survey showed that businesses remain mostly positive about business conditions and the overall economy, with some noting the uncertainty on the impact of the U.S. presidential election.