Monday, December 22nd0.2°C
24563
24564

US service sector expands in May, led by gains in new orders, sales and production

WASHINGTON - U.S. service firms grew more quickly last month as production, hiring and new orders increased, adding to signs that the economy is accelerating after dipping at the start of the year.

The Institute for Supply Management said Wednesday that its service-sector index rose to 56.3 in May, the best reading since August 2013. The figure is an improvement from the 55.2 posted in April. Any figure above 50 indicates expansion.

The report points to solid growth after a brutal winter caused the economy to shrink 1 per cent during the January-March quarter. The gains in new orders and the backlog of existing orders suggest a faster rate of hiring in the months ahead as businesses rush to meet the demand.

"With this level of activity and new orders in the pipeline, employment is going to have to come up," said Anthony Nieves, chairman of the ISM's services survey committee. "There is no way that companies will be able to sustain a good level of output if they don't have the bodies to do it."

The services survey covers businesses that employ 90 per cent of the workforce, including retail, construction, health care and financial services firms. The ISM is a trade group of purchasing managers.

New orders rose for the fifth consecutive month, up 2.3 points to 60.5 and the highest reading since January 2011. The production component also climbed to 62.1, its strongest level since December 2010. Of the 18 industries surveyed in the report, only the mining sector contracted last month.

Several other economic reports indicate that the economy is gaining momentum. The ISM's separate survey of manufacturers on Monday rose to 55.4 in May. Both production and orders notched solid gains.

Auto sales improved in May as well. On Tuesday, Chrysler, General Motors, Nissan and Toyota all reported double-digit sales gains year-over-year. Ford's sales rose a better-than-expected 3 per cent, while Hyundai's were up 4 per cent.

The government issues its May jobs report on Friday. Employers added 288,000 jobs in April, and the unemployment rate fell to 6.3 per cent. Economists expect 220,000 jobs were created in May, according to a FactSet survey.

But payroll processer ADP said Wednesday that private employers pulled back on hiring in May, adding just 179,000 jobs.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX14447.19-21.069
S&P CDNX672.16-4.38
DJIA17901.0096.20
Nasdaq4765.684+0.304
S&P 5002070.47-0.18
CDN Dollar0.8589-0.0028
Gold1189.40-6.50
Oil56.50+2.39
Lumber337.70-0.30
Natural Gas3.169-0.295

 
Okanagan Companies
Pacific Safety0.125+0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.21-0.04
Cantex0.03-0.005
Anavex Life Sciences0.1712-0.0014
Metalex Ventures0.05-0.005
Russel Metals25.17-0.41
Copper Mountain Mining1.57+0.02
Colorado Resources0.11-0.01
ReliaBrand Inc0.011-0.0089
Sunrise Resources Ltd0.02-0.03
Mission Ready Services0.23+0.015

 
23744


23643

FEATURED Property
19094466342 Topham Place
3 bedrooms 3 baths
$497,500
more details
image2image2image2
Click here to feature your property
Please wait... loading


First-time homebuyer mistakes

If you’re on the hunt for your first home and want to have a smooth and successful home purchasing experience avoid these common first-time homebuying mistakes.If you are looking for your first ...


My final thoughts on real estate

This will be the last column I write on real estate. Largely because at the end of the year I will be handing in my license. After 20+ years of working in land development, resort development and rea...


Reflecting on the end of the year

The importance of the end of the year and the Christmas holidays is profound. It is a time to reconnect with family and traditions that have made us who we are. But the year-end has always been a time...

_



24111

24586


Member of BC Press Council


23860