"For many businesses, hiring plans are on hold until the New Year, when — we expect — the fiscal cliff will be resolved"
- Paul Edelstein, an economist at IHS Global Economics
The pace of service sector growth in the world's biggest economy continued gaining momentum in November, while the number of new orders rose as well, giving a positive sign for the economy. The Institute for Supply Management said its services index climbed to 54.7 last month, up from 54.2 the month before. The reading came above analysts' expectations of a growth of 53.5. The business activity index jumped to 61.2 from 55.4, reaching the highest level since February, while the new orders rose as well, hitting 58.1 after October's 54.8, to its highest since March. Despite the fact that all sectors are showing signs of improvement and expansion, employment fell to 50.3 from 54.9, while prices paid tumbled to 57.0 from 65.6.
"For many businesses, hiring plans are on hold until the New Year, when — we expect — the fiscal cliff will be resolved," Paul Edelstein, an economist at IHS Global Economics, said in a note to clients.
"The much larger service side of the U.S. economy remains relatively healthy," said Joseph Trevisani, chief market strategist at Worldwide Markets in Woodcliff Lake, New Jersey. "It has so far avoided the contraction in manufacturing but worse is probably coming in the first quarter of next year as the economy continues to slow."
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