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Report: US services growth jumps in July

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Report:  US services growth jumps in July

Closely-watched index hits highest level in a decade.

The ISM Non-Manufacturing Index rose 4.3 percentage points in July, coming in at 60.3%, compared to 56.0% in June. NMI readings above 50.0 signal expansion, while readings below 50.0 indicate contraction.  It was the highest reading in a decade.

The reading was well above analysts’ expectations of 56.2%.

The Non-Manufacturing Business Activity Index increased to 67.9%, which is 3.4 percentage points higher than the June reading of 64.5%, reflecting growth for the 72nd consecutive month. The majority of the respondents continue to have a positive outlook on business conditions and the overall economy.

The New Orders Index registered 63.8%, 5.5 percentage points higher than the June index.

Jobs creation in the services sector continued to be robust, with the Employment Index increasing 6.9 percentage points to 59.6%.

In commenting on the report, Anthony Nieves, chair of the Institute for Supply Management Non-Manufacturing Business Survey Committee, wasn’t alarmed by the results. “The majority of the respondents continue to have a positive outlook on business conditions and the overall economy. This is reflected directly by a number of new highs for some of the indexes."

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