US service sector activity jumped last month - the latest evidence that the economy rebounded in July - according to a survey released yesterday.
The Institute for Supply Management (ISM) said its index of business activity, based on a survey of purchasing managers in financial services, retail, entertainment and other service-sector industries, rose almost 5 points to 64.8 in July.
The strong reading, driven by a rise in new orders, was well above Wall Street expectations.
However, service-sector executives reported that they did not put on more staff last month, an indication that companies remain cautious about hiring even though demand for their products is increasing.
The ISM's gauge of manufacturing sector activity, released earlier this week, also showed activity in US factories was healthy but there was a slowdown in hiring last month to the lowest level since March.
The July employment report, to be released tomorrow, will be the last big data release before the Federal Reserve's meeting next week. Economists expect a rise of more than 230,000 in payroll employment, after a disappointing June report that showed only 112,000 new jobs were created. The Fed, which is expected to raise rates by a quarter point next week, expects a stronger labour market to support consumer spending. - (Financial Times Service)
