Services industries are booming.
On Wednesday morning, we got two data points on the sector.
Markit US services PMI came in at 55.7 for July, beating estimates.
Economists had forecast a print of 55.2, unchanged from the prior month, according to Bloomberg.
The release noted that new work rose at the fastest pace in three months, and above the historical average. However, confidence in the business outlook fell to the lowest level since June 2012.
Markit chief economist Chris Williamson said, “The Markit PMI data indicate that the US economy enjoyed a good start to the third quarter. Faster growth in services accompanied a similar upturn in manufacturing, leaving the economy on course to see a rate of expansion similar to the 2.3% pace achieved in the second quarter.”
ISM’s non-manufacturing composite was reported at 60.3 for July, a ten-year high that topped the consensus forecast of 56.2.
The arts, entertainment and recreation industry reported the most growth, and most respondents for the survey reported a positive outlook on the economy, according to ISM.
In a note to clients after the data, Barclays economists wrote, ” The employment index surged to 59.6 (previous: 52.7) in July, the highest reading in a decade; this contrasts with the July ADP employment numbers released this morning that showed a deceleration in service sector hiring. On balance, we view the broad-based nature of the improvement in the nonmanufacturing ISM as encouraging and see the US service sector on a positive trajectory in Q3.”
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