"Business spending and investment continues to trend fairly strong despite some apparent consumer income pullbacks"
- Guy Lebas, the chief fixed-income strategist at Janney Montgomery Scott LLC
The pace of growth in the vast U.S. services sector accelerated to its fastest rate in a year, indicating that executives of the biggest part of the economy were not concerned by the upcoming budget cuts. Figures from the Institute for Supply Management's showed that non-manufacturing index increased to 56 last month from 55.2 in January, beating analysts' expectations of a slowdown to 55.0. The boost was mostly provided by the increase in new orders and demand for exports. The report also showed that the new orders index jumped to 58.2 from 54.4, while a gauge of goods for exports soared to its highest level since May 2007, reaching 60.5, up from January's 55.5.
"Business spending and investment continues to trend fairly strong despite some apparent consumer income pullbacks," Guy Lebas, the chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, said before the report. "It's a much more stable outlook."
"Population is up, sentiment about buying homes is up, households are unbundling, creating demand for housing," Larry Sorsby, executive vice president and chief financial officer, said at a Feb. 26 conference. "Consumer confidence is rising, rents are rising."
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