Services Slowdown Highlights Uneven U.S. Expansion: Economy
By Michelle Jamrisko and Victoria Stilwell - Dec 4, 2013
Services from banking to transportation grew more slowly in November, pointing to a U.S. economy that is making progress in fits and starts heading into the new year.
The Institute for Supply Management’s non-manufacturing index dropped to 53.9 from 55.4 in October, the Tempe, Arizona-based group said today. A gauge above 50 shows expansion among companies that account for almost 90 percent of the economy. Other reports showed company hiring picked up more than projected last month and sales of new houses surged in October.
Gains in employment will probably boost growth next year, helping the U.S. overcome government budget cuts and tax increases that have held back the expansion in 2013. Another report showing exports climbed to a record in October indicates American manufacturers will benefit from a global pickup in demand that will further buttress the expansion.
“This is still a moderate recovery, but the data suggest that the recovery is perhaps a bit stronger than what we saw around the turn of the year,” said Dean Maki, chief U.S. economist in New York for Barclays Plc, who projected the services index would drop. “We do think that 2014 is a better year for U.S. growth.”
The median estimate in a Bloomberg survey of 67 economists projected the ISM index would fall to 55. Forecasts ranged from 53.5 to 57. From July 2009, a month after the last recession ended, through last month, the index has averaged 53.9.
Orders Firm
The November decline was paced by a slowdown in hiring and business activity. The ISM’s new orders gauge for the service industries was little changed, capping its strongest four months since mid-2011.
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http://www.bloomberg.com/news/2013-12-04/ism-non-manufacturing-index-in-u-s-fell-to-53-9-in-november.html