The Institute for Supply Management’s employment index accelerated in August, suggesting the labor market for service jobs remained tight.
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U.S. services activity unexpectedly ticked higher in August, marking an eighth straight month of expansion in the sector.
The Institute for Supply Management’s services-activity index on Wednesday showed an August figure of 54.5, accelerating from 52.7 in July. Economics had expected the index to rise at a slower rate of 52.5.
Any reading over 50 marks expansion in the sector, which has grown every month since the beginning of the year, and almost every month since the worst of the global pandemic in the spring of 2020.
“Sentiment among Business Survey Committee respondents varies by industry; however, the majority of panelists are positive about business and economic conditions,” said Anthony Nieves, chair of the ISM Services Business Survey Committee.
The business-activity index ticked higher in August, to 57.3 from 57.1, and the new-orders, prices and inventories indexes similarly increased from the previous month. The supplier-deliveries index—which is inversed to show the effects of higher demand on delivery times—also rose on month, to 48.5 from 48.1.
The employment index also accelerated, suggesting the services jobs market remained tight in August. “The labor market remains very competitive,” said one respondent to the survey.
Thirteen of the industries surveyed reported growth in August, led by real estate, rental & leasing, and accommodation & food services. Five reported a decrease, including agriculture, forestry, fishing & hunting, and mining.
“Overall conditions seem quite good, although there is definite slowdown in residential construction driven by rapidly increasing interest rates,” said one survey respondent, active in the rental & leasing sector.
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