Tue Mar 5, 2019, 01:10 PM

Speedier Growth in Service Side of Economy Might Be Sign of Spring Thaw, ISM Indicates

Published: Mar 5, 2019 11:15 a.m. ET

The service side of the U.S. economy perked up in February in a good sign.
The numbers: Companies on the service side of the economy that employ the vast majority of American workers grew in February at the fastest pace in three months, the first sign that U.S. growth might be picking up after an early-year lull.

The Institute for Supply Management’s survey of senior executives at banks, retailers, restaurants and the like rose to 59.7% last month from 56.7% in January. The increase easily exceeded Wall Street’s forecast.

Numbers over 50% are viewed as positive for the economy, and anything over 55% is considered exceptional.

The strength on the service side of the economy stood in contrast to softer growth in manufacturing. ISM’s manufacturing survey fell in February to the lowest level since Donald Trump was elected in November 2016.

Services play a much bigger part in the U.S. economy, however.

What happened: The index for production and new orders both rose sharply to finish around 65 — exceptionally strong readings that were the highest in 14 years.


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