Growth in U.S. Services Industries Was Steady in January
Growth in U.S. Services Industries Was Steady in January
(Bloomberg) -- America’s service industries expanded in January at about the same pace as in the previous month, indicating resilience in the biggest part of the economy.
The Institute for Supply Management’s non-manufacturing index was 56.5 last month after December’s 56.6 that matched the highest level since October 2015, the Tempe, Arizona-based group’s data showed Friday. Readings above 50 signal expansion at service industries, which account for about 90 percent of the economy. The median forecast in a Bloomberg survey of economists called for 57.
Twelve of 18 non-manufacturing industries reported growth, including mining, retail, and construction. The five that showed a contraction included real estate, rental and leasing; educational services; and transportation and warehousing.
Business activity and new orders eased last month from more than one-year highs, while a measure of employment accelerated, the report showed. Together with the ISM’s latest factory survey, which showed a fifth straight month of expansion, the figures signal steady demand that will keep driving economic growth.
The report “still reflects strong growth,” Anthony Nieves, chairman of the ISM non-manufacturing survey, said on a conference call with reporters. There are still a good number of orders in the pipeline, and overall optimism about policy changes under President Donald Trump, he said.
The group’s non-manufacturing survey covers an array of industries including utilities, retailing, and health care, and also factors in construction and agriculture.
The January report showed the services employment gauge increased to 54.7 from 52.7 the prior month.
The new orders measure cooled to 58.6 in January from 60.7. The business activity index, which parallels the ISM’s factory production gauge, eased to 60.3 from 60.9. The December readings were both the highest since October 2015.
Earlier this week, data showed the ISM manufacturing index climbed in January and was the strongest since November 2014.
As in manufacturing, inflation is firming at service providers. The index of prices paid jumped to 59, the highest since April 2014, from 56.1.
To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net. To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Vince Golle, Randall Woods