- Terry Sheehan, an economist at Stone & McCarthy Research Associates
U.S. non-manufacturing sector, which includes such industries as builders and retailers, saw its activity increasing in July at the fastest pace since December 2005, fuelling more optimism over the economic prospects of the world number one economy. the Institute of Supply Management said its non-manufacturing index rose to 58.7 well above the market consensus of 56.6, moving further away from the 50.0-mark, which separates expansion from contraction. Sixteen U.S. non-manufacturing industries reported growth in July, led by construction and educational services. The gauge has averaged 55 this year compared with 54.7 in 2013. The index is based on a survey, which covers a cluster of industries including utilities, retailing, health care and finance that accounts for almost 90% of the economy.
The Non-Manufacturing Business Activity Index surged to 62.4, which is 4.9 points higher than the June reading of 57.5, indicating growth for the 60th consecutive month at a faster rate. This is the highest reading for the index since February 2011, when the index registered 63.3. The ISM's measure of new orders among service producers also increased in July to the highest since August 2005, when the 65.3 reading was registered. The gauge came in at 64.9, 3.7 points higher than the reading of 61.2 recorded in June.
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