Service sector in US sees growth at record pace

 
Joseph Millis
Barack Obama is enjoying a good run of positive data
America's service sector unexpectedly gained more momentum in August, according to data released yesterday by the Institute for Supply Manage­ment (ISM).

And the ISM’s employment index hit a multi-year high ahead of the government’s payrolls rep­ort, due out today.

The ISM’s non-manufacturing purchasing managers index increased to 59.6 in August from 58.7 in July. The August reading is the highest since the survey began in January 2008.

Within the ISM non-manufacturing survey, the report said: “The majority of the comments reflect continued optimism [about] business conditions.”

Data provider Markit said its own service-sector composite PMI stood at 59.5 in August from 60.8 in July.

As with the ISM, Markit readings above 50 indicate activity is expanding.

Markit said: “Anecdotal evidence suggested that business confidence was boosted by rising underlying demand and hopes that the domestic economic recovery has become further entrenched.”

The two reports indicated that the US economy was growing at a solid pace this quarter.

“The [ISM ]report is very positive,” said Anthony Nieves, who oversees the ISM survey.

But he cautioned that the indexes had been so strong in recent months, the numbers could “taper off” in the future.