US services sector speeds up in Feb

WASHINGTON: The US services sector, the main driver of the economy, saw growth hit its fastest pace 15 months in February, according to industry data released yesterday. The Institute for Supply Management’s Non-Manufacturing Index rose a full point from January to 57.6 percent, seasonally adjusted, the highest reading since October of 2015. The index, which surveys activity among all segments of the services industry, has recorded continuous growth for more than seven years. A reading above 50 percent indicates expansion.

Companies in 16 of the 18 sectors surveyed reported growth, with only the real estate and information industries reporting contraction, ISM said. Ian Shepherdson of Pantheon Macroeconomics said the results were “very strong” and likely to keep monthly job creation above 200,000 new positions into early spring at least. “The message here is that underlying spending growth is robust, despite the sharp drop in real consumption in January,” he wrote in a client note.

The ISM report’s components showed some notable high points: the Business Activity Index hit its highest level since February 2011 at 63.6 percent, and employment rose a half point to 55.2 percent. Comments from respondents were mixed but most had a positive outlook. A construction sector executive reported a tight labor market, financial services noted a pickup in lending and mining saw a strong start to the first quarter. — AFP