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US services sector growth recovers slightly in August
[WASHINGTON] Growth in the all-important US services sector quickened in August after a sluggish July but farms and the transportation and warehousing sector reported contraction, according to a survey released Wednesday.
The monthly gain was not enough to recover all of July's losses, however, despite rising indices for employment and new export orders, according to the Institute for Supply Management.
The ISM non-manufacturing index rose 1.4 points to 55.3 per cent, a tenth higher than an analyst forecast. A reading of above 50 per cent indicates growth and August marked 92 consecutive months of expansion, according to the survey.
Fifteen of 17 services industries reported growth but low dairy and cattle prices have left some farmers struggling or going out of business, respondents said.
"The depressed agricultural economy has resulted in lower demand and less sales volume," a respondent was quoted as saying.
"The non-manufacturing sector has rebounded from the prior month's cooling-off period," Anthony Nieves, a committee chair for the survey, said in a statement.
"The majority of respondents are optimistic about business conditions going forward." Business activity gained 1.6 pints to reach 57.5 per cent, reflecting 97 consecutive months of growth. The employment index also added 2.2 percentage points, rising to 57.9 per cent.
Ian Shepherdson of Pantheon Macroeconomics said the result suggested strong job growth could continue in the coming months but that Hurricane Harvey, and possibly Hurricane Irma, now bound for Florida, could cause a temporary drop.
Following Hurricane Katrina in 2005, the employment index fell by 4.8 points, he said in a research note.
"We tentatively expect bigger declines this time around, but the key point for now is that ahead of the storms, the non-manufacturing sector was in good shape," he said.