Service Industries in U.S. Expand at Fastest Pace in Nine Years
Source: Bloomberg
By Jeanna Smialek Sep 4, 2014 10:00 AM ET
Service providers expanded in August at the fastest pace in nine years, a sign of growing momentum in the broadest sector of the U.S. economy.
The Institute for Supply Management’s non-manufacturing index climbed to 59.6, the strongest since August 2005, from 58.7 a month earlier, the Tempe, Arizona-based group said today. The gauge exceeded the highest estimate in a Bloomberg survey, which had a median forecast of 57.7. Readings greater than 50 signal expansion.
The boom at service providers and faster growth in manufacturing demonstrate a broadening of the economic expansion that’s encouraging businesses to invest in more equipment. Further improvement in the job market has the potential to spur gains in consumer confidence and spending, particularly if a tighter labor market begins to drive up wages.
The economic expansion in becoming “self-sustaining,” Robert Stein, deputy chief economist at First Trust Portfolios LP in Wheaton, Illinois, said before the report. Progress in the job market ‘is supportive of income growth, which supports consumer spending and business growth, which supports more job growth.”
Read more: http://www.bloomberg.com/news/2014-09-04/service-industries-in-u-s-expand-at-fastest-pace-in-nine-years.html
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