WASHINGTON (AP) — U.S. services firms grew at a slightly faster pace in January, led by hotels, restaurants and financial firms.
The Institute for Supply Management said Wednesday that its services index rose to 56.7 in January, up a small amount from a revised reading of 56.5 in December.
Both months were below a revised November reading of 58.8, which was the best showing since last May. The November level was revised substantially lower from a previous estimate of 59.3, which had been near an eight-year high.
Any reading over 50 indicates expansion.
Paul Ashworth, chief U.S. economist at Capital Economics, said that the services sector of the economy is being helped by the boost to households' purchasing power form lower energy prices, which is giving consumers more to spend on other items.
The ISM reported on Monday that its index for manufacturing fell to 53.5 in January, the third straight drop, pushing this gauge of factory activity to its slowest pace in a year.
The ISM is a trade group of purchasing managers. Its survey of services firms covers businesses that employ 90 percent of the American workforce, including retail, construction, health care and financial services companies.
Eight services industries reported growth in January, while eight industries reported that activity contracted. The industries reporting the biggest contractions were mining and arts and entertainment.
The economy grew at an annual rate of 2.6 percent in the October-December quarter after growing at a sizzling 5 percent rate in the summer. Economists believe that strong employment gains and rising consumer spending will support solid growth of around 3 percent in 2015, which would be the best annual gain in a decade.