US service sector hit new heights last month

WASHINGTON — Growth in the services sector, where most Americans work, hit an all-time high in November, overtaking a record that was set the previous month.

The Institute for Supply Management reported Friday that its monthly survey of service industries increased by 2.4 percentage points in November from the October record to a reading of 69.1 percent. Any reading above 50 indicates growth.

The service sector data are being released against the backdrop of an employment landscape in which hiring appeared to slow in November, but the unemployment rate tumbled from 4.6% to 4.2%. That is a historically low jobless rate though still above the pre-pandemic level of 3.5%.

Some of the strength in the services sector is coming from supply chain troubles that are making it harder to meet increased demand.

All 18 service sector industries reported growth in November and since recording two months of contraction last year in April and May when the pandemic was raging, the overall index has now grown for 18 consecutive months.

Anthony Nieves, head of the ISM services sector survey committee, said the responses for the November report were gathered before reports started coming out about the new omicron variant. He said while the new variant could affect service sector activity it will depend on how much the new variant increases infections.

The responses from service sector businesses showed that the supply chain delays and difficulty finding workers were having a widespread impact. One survey respondent in food services pointed to “labor shortages, transportation delays and supply constraints” as big issues.