Thursday, September 5, 2013

Service Sector Surged in August

The service sector continued to improve in August, with the ISM’s non-manufacturing index surging to its highest level since 2005. The non-manufacturing index rose 2.6 points to a reading of 58.6, well above the 52.2 low seen just two months prior. The solid improvement in the index gives more evidence that the economy strengthened in the third quarter.

The non-manufacturing index has now been above 50 for 44 months. Any reading above 50 indicates industry expansion.

The details of August’s report were strong as well, with nearly all components improving. New orders broke above 60, reaching their highest level since February 2011. In addition the employment index more than recovered from its slight drop the previous month, reaching 57.0, the best seen since the beginning of the year. The improvement in the employment portion of the index is a positive for tomorrow’s jobs report.

The only negative detail in August’s report were the trade details, which saw imports increase more than exports, suggesting the nominal trade deficit widened in August, which would drag on GDP.

Read the ISM release.

No comments:

Post a Comment

Please read our comment policy before making a comment.