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Title: U.S. Service Sector Activity Grows Faster Than Expected
Source: RTT
URL Source: http://www.rttnews.com/1960744/u-s- ... expected.aspx?type=fts&Node=B3
Published: Sep 6, 2012
Author: RTT
Post Date: 2012-09-06 10:57:53 by Brian S
Keywords: None
Views: 256

(RTTNews) - Economic activity in the U.S. service sector grew for the 32nd consecutive month in August, according to a report released by the Institute for Supply Management on Thursday, with the pace of growth accelerating by more than anticipated.

The ISM said its non-manufacturing index rose to 53.7 in August from 52.6 in July, with a reading above 50 indicating an increase in activity in the service sector. Economists had been expecting the index to show a more modest increase to a reading of 53.0.

Anthony Nieves, chair of the ISM Non-Manufacturing Business Survey Committee, said, "According to the NMI, 10 non-manufacturing industries reported growth in August."

"Respondents' comments continue to be mixed, and for the most part reflect uncertainty about business conditions and the economy," he added.

The report showed a turnaround by employment in the service sector, with the employment index climbing to 53.8 in August 49.3 in July.

The previous month's reading on the employment index below 50 had pointed to the first contraction in service sector employment since December of 2011.

On the other hand, the report showed that the business activity index dipped to 55.6 in August from 57.2 in July, pointing to a slowdown in the pace of growth.

The new orders index also edged down to 53.7 in August from 54.3 in July, although it remained above the key 50 level for the 37th consecutive month.

With regard to inflation, the prices index jumped to 64.3 in August from 54.9 in July, indicating a notable acceleration in the pace of price growth.

Tuesday morning, the ISM released a separate report showing a continued contraction in activity in the U.S. manufacturing sector in the month of August.

The manufacturing index edged down to 49.6 in August from 49.8 in July, with the drop surprising economists, who had expected the index to inch up to 50.0.

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