Economy

US Service Sector Expanded More Than Expected as Economy Grows

A broad gauge of US economic activity ticked up in October to its highest level in more than 12 years.

Activity in the USA service sector unexpectedly grew at a faster rate in the month of October, according to a report released by the Institute for Supply Management on Friday.

The Institute for Supply Management said Friday that its services index rose last month to 60.1 from 59.8 in September.

Economists surveyed by The Wall Street Journal had expected an October reading of 58.0.

There's no question that the USA economy appears to be stronger than it was a year ago, said Anthony Nieves, chair of the ISM non-manufacturing business survey committee.

For services companies, measures of business activity and employment improved last month.

"The non-manufacturing sector has reflected the third consecutive month of strong growth", Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee. The highest reading among pre-2008 composite index calculations was 61.3% in August of 2005.

Meanwhile, the ISM's non-manufacturing export index reached a six-month high, underscoring a general pickup in global demand. But a measure for new orders - while still positive - weakened slightly. In September, the gauge rose by the most since 1997 as energy and chemical producers around Houston were recovering from Hurricane Harvey.

A separate ISM index that tracks the manufacturing sector fell in October to 58.7, remaining in solid-expansion territory, the group said Wednesday.

Some 16 sectors reported growth during October, led by agriculture, while two sectors including educational services reported contraction.

The registered 62.8 in October, down from the reading of 63.0 in the previous month. The improving conditions point to continued economic growth in the months ahead.



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