U.S. services expanded at a stronger pace in August, driven by an uptick in business activity and new orders.
The Institute for Supply Management, an association of purchasing managers, says that its non-manufacturing index rose to 56.4 from 53.7 in July after two months of cooler growth. Readings above 50 signal growth. Services make up the bulk of US economic activity, so the results are a reassuring signal of continued economic strength.
While services companies surveyed express their concern over tariffs and geopolitical uncertainty, they appear so far to have avoided the challenges faced by the manufacturing sector.
The index’s measures of business activity and new orders drove the rebound, climbing by 8.4 and 6.2 percentage points. Hiring activity fell by 3.1 points as employment grew at a slower pace.