NEW YORK – The U.S. services sector expanded at a faster pace in January as new orders picked up, the Institute for Supply Management reported Thursday.
ISM's non-manufacturing business activity composite index was 59.4 in December, 57.1 in December, on a seasonally adjusted basis, the group said today.
Economists polled by Thomson Reuters had expected a 62.0 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, jumped to 72.1 from 69.5.
The employment index increased to 54.5 from 52.6.
The business activity/production index rose to 63.5 from 57.0, the new orders index was at 64.6, up from 62.9; backlog of orders gained to 50.5 from 48.5; new export orders decreased to 53.5 from 56.0; inventories dipped to 49.0 from 52.5; inventory sentiment slid to 60.0 from 61.5; the supplier deliveries index rose to 53.5 from 51.5; and imports increased to 53.5 from 51.0.
Members' general comments on business in the month included:
“New initiatives creating increase in spending.” (Finance & Insurance)
“Indications are that business is picking up and that 2011 could see positive growth across many industries. We are seeing an increase in orders at the beginning of the year.” (Professional, Scientific & Technical Services)
“Starting to see higher prices in many areas. Low inventory levels are leading to longer delivery time frames.” (Public Administration)
“Business uncertainty seems to be subsiding.” (Management of Companies & Support Services)
“Business activity is picking up. The challenges in the textile market (cotton/polyester) are significantly impacting price along with the inability to secure pricing for a period longer than two months.” (Accommodation & Food Services)
“2011 looking better than 2010.” (Information)
