WASHINGTON (AP) — Growth picked up last month at U.S. services companies, which have been a source of strength for the American economy.
The Institute for Supply Management said Tuesday that its services index rebounded to 54.5 in March from a two-year low of 53.4 in February. Anything above 50 signals growth.
Business activity and new orders grew faster. A measure of export orders surged to the highest level in a year. A measure of employment in services registered 50.3 after contracting in February.
Overall, "this is the best reading since December but still a far cry from the torrid figures seen through most of last year," Stephen Stanley, chief economist at Amherst Pierpont Securities, wrote in a research report. The index averaged 57.2 last year, he notes.
The ISM is a trade group of purchasing managers. Its services survey covers businesses that employ the vast majority of workers, including retail, construction, health care and financial services companies.
Services have been a source of strength for the U.S. economy at a time when manufacturing has been hurt by weak demand for U.S. goods overseas and a strong dollar that makes U.S. products more expensive. Consumer spending on services grew at a 2.8 percent annual pace from October through December, twice as fast as the overall economy expanded during those months. Hiring by services firms account for 90 percent of the 2.8 million jobs U.S. employers have added over the past year.