Recovery Broadens on Services Growth
Wednesday November 5, 10:50 am ET
By Eric Burroughs
NEW YORK (Reuters) - The robust U.S. economic rebound appears to be broadening, with reports on Wednesday showing the services sector expanding briskly in October for a seventh straight month, leading to hiring, while businesses spent more on factory goods in September.
The Institute for Supply Management said its index of service sector businesses rose to 64.7 in October from 63.3 the prior month, just shy of the record level hit in July and August and beating forecasts.
Any reading above 50 suggests expansion in the services sector, which comprises the vast bulk of the economy and includes everything from travel agencies to restaurants and construction.
More importantly, the employment component of the ISM index jumped to its highest level in three years, rising to 52.9 from 49.1, suggesting the economy's recent stellar performance is leading to more jobs.
"Particularly encouraging is the employment number, which we have been hoping would turn things around this quarter," said Kurt Karl, head of economic research at reinsurer Swiss Re in New York. He said the data was "positive, positive, positive." |
