Service sector expands in July at fastest pace in 5 months

Los Angeles Times

WASHINGTON — The nation’s service sector, a crucial economic component, expanded in July at its fastest pace in five months, the Institute for Supply Management said Monday.

The group’s purchasing managers’ index for nonmanufacturing businesses rose to 56 last month, from June’s 52.2. A reading above 50 indicates the sector is expanding.

The June reading was the lowest since early 2010, raising concerns about a summer slowdown.

But service-sector growth rebounded sharply last month. The pace beat analyst expectations and was the best since February, ISM said.

Of the 18 industries the index tracks, 16 reported growth in July, including construction, real estate, finance, and hotel and food services.

The two sectors reporting contraction were mining and health care and social assistance.

The sector’s business activity and production index jumped to 60.4, from 51.7, marking the best reading since December. A sign of future activity, the new orders index, rose to 57.7, from 50.8.

But unlike ISM’s manufacturing index data released last week, showing U.S. factories expanding at their fastest pace in two years, not all the signs in the services sector were positive.

Employment growth slowed in July. The ISM employment index fell to 53.2, from 54.7. That’s a discouraging sign given Friday’s government report that job growth slowed in July from the previous month.

“The slowdown in employment growth is a concern, and the jump in the business activity index has more to do with sentiment than actual activity,” said Paul Edelstein, director of financial economics at IHS Global Insight.

“But it appears that the slow (descent) toward stagnation that began in March, on both the manufacturing and non-manufacturing sides, is over,” he said.

More in Herald Business Journal

Health-care consumers need to take the lead, so get smart

David Russian, CEO of Western Washington Medical Group, writes our third essay about fixing health care.

JCPenney partners with EvCC, WSU to assist students

Earlier this month, JCPenney partnered with the Career Service Centers at Everett… Continue reading

Re/Max Elite adds two agents in Lynnwood

Jenelle Dent and Lori DaSilva have joined Re/Max Elite as agents at… Continue reading

Register for Marysville Tulalip Business Before Hours event

The Greater Marysville Tulalip Chamber of Commerce holds its next Business Before… Continue reading

Wells Fargo donates $2,500 to Edmonds Center for the Arts

Edmonds Center for the Arts has received a grant of $2,500 from… Continue reading

More business, more competition for Everett kidney dialysis center

Nonprofit Puget Sound Kidney Centers sees large for-profit competitors enter state market.

Molina Medical holds fall carnival for families in Everett

Molina Medical is hosting a free event for families in the Everett… Continue reading

Leadership Snohomish County celebrates 20 years of service

Leadership Snohomish County is celebrating its 20th anniversary. The organization was launched… Continue reading

Snohomish, Monroe manufacturers honored for innovation, excellence

Two Snohomish County companies have been honored with Manufacturing Excellence awards at… Continue reading

Most Read