Report: Services Sector Growing, But Employment Still Slow

The service sector of the U.S. economy showed some encouraging signs of growth in July, a study released Friday shows, although employment numbers from the same study — as well as the Labor Department — were a bit of a mixed bag.

The Institute for Supply Management, in Tempe, Ari., reported its services index score rose to 52.6 in July, up from 52.1 in June, which not only showed growth but also out-performed economists’ expectations. The growth was attributable to an uptick in new orders, which also grew from 53.3 in June to 54.3 in July. Anything over 50 is considered growth.

The services sector is particularly wide, and makes up close to 90 percent of the U.S. economy.

Despite the rosy news, the economic stats weren’t all positive: the ISM’s employment gauge shrank to its lowest point since last fall, at 49.3. Also Friday, the Labor Department indicated that while the economy gained 163,000 jobs, although the overall unemployment rate actually ticked up to 8.3 percent from 8.2 in June.

“The employment picture is a little bit of a concern,” Anthony Nieves, chairman of the Institute for Supply Management Non-Manufacturing Business Survey Committee, was quoted during a conference call with reporters. “Overall, non-manufacturing has been resilient. We’re still on the path for continued growth.”

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ABOUT Ian Stewart

Ian is a veteran journalist who has covered sports for various news outlets. Previously, he was managing editor for an electronic-book publishing company and a public relations writer.