Growth in the giant US services sector matched an all-time high in August, giving further evidence of an improving economy, a report showed today.
Robust demand for services ranging from restaurants and stores to banks and tourism kept the Institute for Supply Management barometer for the sector steady at 65.1 in August from July.
For a second straight month, it was the highest reading since the survey was first conducted in July 1997. The results handily beat Wall Street forecasts for a dip to 63.0.
"The service sector is rampaging ahead in the third quarter," said Mr Ian Morris, chief economist at HSBC Securities. A reading above 50 denotes growth in the sector, which comprises about 80 per cent of the US economy. A figure below 50 indicates contraction.
Analysts worry that a recovery which fails to create jobs could eventually peter out if consumption begins to flag. So far, however, consumers have exhibited a seemingly insatiable appetite for new cars and homes.
Such spending has led many economists to boost their growth forecasts for the third quarter, with some estimates pegging US gross domestic product as high as 7 per cent.
Mr Ralph Kauffman, who heads ISM's services survey committee, said job creation should pick up if growth managed to retain its current strength.