Services in U.S. Expand at Fastest Pace in Five Months

[Purveyor]

Source: Bloomberg

By Victoria Stilwell - Aug 5, 2013

Service industries in the U.S. expanded in July at the fastest pace in five months, a sign the world’s biggest economy will improve after slowing the last three quarters.

The Institute for Supply Management’s non-manufacturing index increased to 56, exceeding all forecasts in a Bloomberg survey, from a more than three-year low of 52.2 in June, a report from the Tempe, Arizona-based group showed today. The median estimate called for a gain to 53.1. Readings higher than 50 indicate growth in the industries that make up almost 90 percent of the economy.

The figures follow the group’s report last week that showed manufacturing advanced at the fastest rate in more than two years, indicating the expansion is broadening. The recovery in the housing market and record equity values are bolstering household finances, laying the ground for a pickup in consumer spending on goods and services that account for about 70 percent of the economy.

“The pickup in July wasn’t limited to the manufacturing sector,” said Brian Jones, senior U.S. economist at Societe Generale in New York, whose forecast of 55 was the highest forecast in the Bloomberg. “Things are picking up going into the third quarter of the year.”

Read more: http://www.bloomberg.com/news/2013-08-05/ism-non-manufacturing-index-increased-to-56-in-july-from-52-2.html

[PoliticAverse]

1. "New jobs disproportionately low-pay or part-time"

http://news.yahoo.com/jobs-disproportionately-low-pay-part-time-162103614.html

[Crow73]

3. Yes

Until wages go up I am not holding my breath.

[earthside]

2. It's a survey.

And ... the whole article reads like propaganda.

I'm not believing the substance of it.

All the corporate elites have done is grow the part-time, low-wage population -- it looks like more activity, but my hunch is that qualitatively there isn't really much 'growth'.

[DallasNE]

4. The Stock Market Is Down Today

Showing that they don't put much stock in this report either.

[Igel]

5. Greatest growth in 5 months?

That's not a horribly long time. It does imply, however, that there was a slow down in job creation for 4 months.

A lot of the newsy reporting has been suspicious. You can spin things two ways: "Service job growth recovers after 4 month slump" or "Services job growth highest in 5 months." Which you pick reveals your frame of reference.

One can "talk down" the economy and make consumer sentiment decline; one can "talk up" the economy and make consumer sentiment increase. The end result, of course, is that consumer sentiment then becomes at least as much a lagging indicator of press coverage as it is a leading indicator of economic growth.