U.S. Services Growth Exceeds Expectations in Broad Advance
Tuesday, 5 November 2019 22:11 WIB |
ECONOMY |ISM ASEkonomi AS
U.S. service industries expanded more thanforecast in October after tumbling to a three-year low as measures of employment, orders and business activity improved, indicating stable but moderate growth in the biggest part of the economy.
The non-manufacturing index rose to 54.7 from 52.6, an Institute for Supply Management survey showed Tuesday. The reading exceeded the median estimate of 53.5 in a Bloomberg survey of economists. While the figure is close to this year's average, it remains well below the 2018 average, consistent with the slowdown in economic growth.
The reading may help temper concern that the widespread weakness in manufacturing will drag down the rest of the economy. Continued strength in services -- which make up roughly 90% of the economy -- following a report Friday that showed steady job growth will help validate Federal Reserve Chairman Jerome Powell's view that monetary policy is currently in a œgood place after three rate cuts this year.
The ISM's measure of employment rose to 53.7 in October from a five-year low the month prior, as firms continue to add workers. The rebound in the employment gauge is in line with last week's upbeat jobs report which showed employers added a robust 128,000 employees last month despite special factors shaving more than 60,000 off the headline number.
The ISM's gauge of business activity among non-manufacturers, which parallels the group's measure of factory production, rose to 57 in October from 55.2. Readings above 50 indicate expansion.
Source : Bloomberg