Posted: Tuesday, August 5th 2014 at 1:48pm
US services firms grow at fastest pace in 8 years; factory orders rise
By The Associated Press
WASHINGTON (AP) -- U.S. services firms grew at the fastest rate in more than eight years in July, the latest sign of an economy picking up speed in the second half of the year. In addition, a second report issued Tuesday shows U.S. factory orders are up.
The Institute for Supply Management said Tuesday that its service-sector index jumped to 58.7, up from 56 in June. Any figure above 50 indicates expansion. June's reading is the highest since December 2005. The ISM is a trade group of purchasing managers.
The services survey covers businesses that employ 90 percent of the workforce, including retail, construction, health care and financial services firms.
The strong reading suggests Americans are increasingly confident about the economy and willing to spend more. Sixteen industries tracked by the survey grew in July, led by construction, educational services and retail. Only utilities said that business slowed last month.
"We are encouraged by the widespread strengthening in demand evident in this survey," said Paul Dales, an economist at Capital Economics.
US FACTORY ORDERS RISE 1.1 PERCENT IN JUNE
Orders to U.S. factories increased in June, led by demand for aircraft, industrial machinery and computers and electronics.
Orders rose a seasonally adjusted 1.1 percent compared to the previous month, the Commerce Department reported Tuesday. Factory orders had fallen 0.6 percent in May after three straight months of gains.
An 8.4 percent jump in demand for commercial aircraft fueled the latest gains. But there were additional increases outside this volatile category that point to businesses investing with the expectation of economic growth.
Orders for machinery rose 2.9 percent. Iron and steel mills had a 1.7 percent increase in demand, while orders for computers and electronic products were up 2.9 percent.
Excluding military hardware, factory orders rose 1 percent in June from May.
Over the past year, factory orders were up 2.5 percent.
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