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

Driving the Dodge Demon, the world’s fastest production car

Our test took place at US 131 Motorsports Park, on a fully prepped professional drag strip.

Mountlake Terrace-based 1st Security Bank wasn’t traded publicly during the recession, but it has seen a steady growth since the recession. (Jim Davis / HBJ)
How stocks in local banks fared since the recession

Every bank was hit hard during the recession, but most have bounced back in a big way.

A look at what some stores have planned for Black Friday

With unemployment low, stores are hoping customers are in a mood to shop.

Boeing bolsters team for potential 797 with leading engineer

Terry Beezhold has been chief project engineer for the 777X program.

Tom Hoban
Are millennials warming up to life in suburbia?

They dominate the apartment market and their wants need to be accounted for, says columnist Tom Hoban.

Camano artist mixes flask, paintings for successful cocktail

Art flasks prove popular as bachelorette gifts, birthday presents and wedding favors.

Katie Garrison
New agent joins Re/Max Elite’s office in Snohomish

Re/Max Elite welcomed a new agent to its Snohomish office. Katie Garrison… Continue reading

UW Bothell Pub Talk looks at Greenhouse Gas Mystery

The Greenhouse Gas Mystery is the topic for the next UW Bothell… Continue reading

EvergreenHealth Monroe pharmacy interns travel to Ghana

Earlier this year, University of Washington School of Pharmacy students and EvergreenHealth… Continue reading

Most Read