Service Sector Growth Speeds Up in July to 10-Year High

U.S. service sector growth sped up in July by its fastest pace in ten years, fueled by a surge in business activity, employment and new orders. An industry report released Wednesday by the Institute for Supply Management said its services sector index rose to 60.3, its highest reading since August 2005,

While it is a sign that the non-manufacturing, lower-paying service sector was growing faster than expected, it now accounts for more than two-thirds of U.S. economic activity. Economists’ expectations were for a reading of 56.2, according to a Reuters poll. A reading above 50 indicates expansion in the service sector, while readings below 50 point to contraction.

The business activity subindex rose to 64.9, compared with expectations for a reading of 61. It was the best reading for that index since December 2004. The employment index rose to 59.6, its strongest since August 2005.