U.S. Service Sector Growth Unexpectedly Accelerates In November
The Institute for Supply Management released a report on Friday showing an unexpected acceleration in the pace of growth in U.S. service sector activity in the month of November.
The ISM said its services PMI rose to a record high 69.1 in November from 66.7 in October, with a reading above 50 indicating growth in the sector. The increase surprised economists, who had expected the index to dip to 65.0.
“In November, record growth continued for the services sector, which has expanded for all but two of the last 142 months,” said Anthony Nieves, Chair of the ISM Services Business Survey Committee.
“Demand continues to outpace supply that has been impacted by capacity constraints, shortages of labor and materials, and logistical challenges,” he added. “This has also caused demand-pull inflation that is affecting overall business conditions.”
The unexpected advance by the headline index partly reflected a significant acceleration in the pace of growth in business activity, as the business activity index jumped to 74.6 in November from 69.8 in October.
The employment index also shot up to 56.5 in November from 51.6 in October, indicating an acceleration in the pace of job growth in the service sector.
However, a Labor Department report released earlier in the day showed employment in the service-providing sector rose by 175,000 jobs in November after spiking by 534,000 jobs in October.
The ISM said the new orders index and the supplier deliveries were unchanged from the previous month at 69.7 and 75.7, respectively, while the backlog of orders index fell to 65.9 in November from 67.3 in October.
The prices index also edged down to 82.3 in November from 82.9 in October, although the index was still at its third-highest reading since September 2005.
On Wednesday, the ISM released a separate report showing manufacturing activity in the U.S. grew at a slightly faster rate in the month of November.
The ISM said its manufacturing PMI crept up to 61.1 in November from 60.8 in October. Economists had expected the index to inch up to 61.0.
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