Service-sector growth picks up in July
WASHINGTON -- U.S. service companies, which employ 90 percent of Americans, grew at a slightly faster pace in July.
The Institute for Supply Management reported Friday that its index of nonmanufacturing activity picked up slightly last month with a reading of 52.6. That was up from June's reading of 52.1, which had been the lowest since January 2010.
Any reading above 50 indicates expansion. The service sector has now grown for 31 straight months. But even with the July gain, the services index remains far below its recent high of 57.3, hit in February.
Part of the strength in the service sector in July came from a rise in the index component that tracks new orders. Service companies include retail, construction, financial services, health care and hotels, among other industries.
Economists said the July reading was encouraging because it at least showed a small rebound after a decline in activity in June.
Paul Dales, senior U.S. economist at Capital Economics, said an index reading at this level was consistent with growth in the overall economy at a sluggish pace of 1 percent to 1.5 percent in the current July-September quarter. ---- AP