NEW YORK – The U.S. services sector expanded at a quicker pace in February as the non-manufacturing business activity composite index was 57.3 in the month, compared to 56.8 in January, on a seasonally adjusted basis, the Institute for Supply Management reported Monday.
Economists polled by Thomson Reuters had expected a 56.1 level.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
The prices paid index, closely watched for signs of inflation, gained to 68.4 from 63.5.
The employment index decreased to 55.7 from 57.4.
The business activity/production index rose to 62.6 from 59.5, the new orders index was at 61.2, up from 59.4; backlog of orders grew to 53.0 from 49.5; new export orders fell to 54.5 from 56.5; inventories rose to 53.5 from 47.0; inventory sentiment declined to 61.5 from 58.5; the supplier deliveries index dipped to 49.5 from 51.0; and imports decreased to 52.0 from 55.0.
Members' general comments on business in the month included:
“Year-over-year and month-over-month growth continues. Market conditions improved dramatically.” (Information)
“Although customer traffic continues to decline, discretionary spending per capita is increasing. There is a bit more confidence regarding current economic conditions, spurring on slightly more aggressive marketing to capture new customers and encourage repeat visits.” (Arts, Entertainment & Recreation)
“Business is generally flat, but showing signs of improvement.” (Health Care & Social Assistance)
“Bracing for impact of fuel price increases on delivered commodity prices.” (Educational Services)
“Optimism is all around, but sales remain sluggish. Activity shows interest, but market [is] very price sensitive.” (Professional, Scientific & Technical Services)
“Signs are building that things are starting to settle and business is stabilizing. Although orders aren’t increasing rapidly, they are steady and consistent instead of the radical swings of the past two years. We hope that this trend will continue.” (Retail Trade)
“Demand [is] gradually increasing for most business sectors.” (Wholesale Trade)
