[NEW YORK] Growth in the vital US services sector accelerated in August as businesses activity remained strong despite higher costs due to trade disputes, according to an industry survey Thursday.

The Institute for Supply Management said its monthly survey showed its non-manufacturing index rose to 58.5 per cent, up 2.8 per cent from July when trade disputes had weighed on growth.

Several companies reported higher costs connected to items employing steel and aluminum that are the subject of steep import tariffs.

But that impact did not drag on overall business activity, the data show. The three key components of the survey - new orders, employment and prices - all increased compared with July.

"Even though there's a bit of uncertainty, it's really not put a damper on activity," said Anthony Nieves, chair of ISM's survey committee for the non-manufacturing sector.

"It's supply and demand," Nieves told reporters. "If the economy is as strong as it is, it's not going to stifle the growth."

The report is the latest solid piece of US economic data and comes on the heels of positive reports on employment, growth and consumer confidence, as well as strong quarterly earnings period that has lifted the stock market to records in the last 10 days.

But businesses have been unnerved by President Donald Trump's confrontational trade policy and high tariffs on goods from key trading partners, which he uses to pushing for more advantageous terms of trade for the United States.

US and Canadian officials signaled Wednesday they were closer to a new continental trade pact, following recent progress with Mexico.

But there have been no further discussions with China to try to resolve a bitter dispute with Beijing, and Mr Trump could announce new punitive taxes on US$200 billion of annual imports from China as soon as Friday.

The August ISM data show a "clear rebound" from July, said Ian Shepherdson, chief economist at Pantheon Macreconomics.

"The weakness of the previous three months, triggered by the initial imposition of tariffs on metals, has been reversed," he said in a note.

AFP