After reporting a slowdown in the pace of growth in U.S. service sector activity in the previous month, the Institute for Supply Management released a report on Wednesday showing a rebound in the pace of growth in the month of August.
The ISM said its non-manufacturing index climbed to 55.3 in August after falling to 53.9 in July, with a reading above 50 indicating growth in the service sector. Economists had expected the index to rebound to 55.8.
"The non-manufacturing sector has rebounded from the prior month's cooling-off period," said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee. "The majority of respondents are optimistic about business conditions going forward."
The rebound by the headline index was partly due to a notable increase by the employment index, which jumped to 56.2 in August from 53.6 in July.
However, the Labor Department's monthly jobs report released last Friday showed the service-providing sector added just 95,000 jobs in August.
The report also said the new orders index rose to 57.1 in August from 55.1 in July, while the business activity index climbed to 57.5 from 55.9.
On the inflation front, the prices index increased to 57.9 in August from 55.7 in July, indicating price growth for the third consecutive month.
The ISM released a separate report last Friday showing activity in the manufacturing sector expanded faster than expected in the month of August.
The report said the purchasing managers index climbed to 58.8 in August from 56.3 in July, while economists had expected the index to inch up to 56.5.
The bigger than expected increase lifted the purchasing managers index to its highest level since reaching 59.1 in April of 2011.
by RTT Staff Writer
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