Service Sector Grows
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
NEW YORK (AP) – The nation’s service sector expanded at a faster-than-expected pace in May, suggesting it could be a driver for broader economic growth as the automotive and housing industries slump, a research group said Tuesday.
The Institute for Supply Management, based in Tempe, Ariz., said its index of business activity in the non-manufacturing sector was 59.7 in May. The reading was higher than April’s reading of 56 and Wall Street’s expectation of 56.
A reading above 50 indicates expansion, while one below indicates contraction.
The service industries covered by the ISM report represent about 80 percent of economic activity and span diverse industries including banking, construction, retailing, mining, agriculture and travel.
May represents the 50th consecutive month of growth in the non-manufacturing sector, but the index is still below the 2006 average reading of 58.
The ISM report came after Fed Chairman Ben Bernanke’s comments Tuesday morning that the economy will recover from its recent feeble performance. Mr. Bernanke’s forecast of rebounding growth made it appear unlikely the central bank will lower rates anytime soon, a disappointment for some investors.
