Your Economy (No Politics)

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U.S. ISM Services Index Rises to 59.8 in December From 58.5 Listen
by Carlos Torres in Washington


Jan 5. (Bloomberg) -- U.S. service industries expanded at a faster pace last month as job growth and rising incomes gave Americans the means to increase their spending.

The Institute for Supply Management's index of financial services, construction, retail and other non-manufacturing businesses rose to 59.8 from 58.5 in November. Readings higher than 50 indicate expansion.

Consumer spending will help the economy accelerate early this year after 2 million more Americans found jobs in 2005, economists said. December sales gains by retailers including Federated Department Stores Inc. and Target Corp. suggest consumers are holding up as the new year begins.

``The service sector should continue to see strong growth,'' Dean Maki, chief U.S. economist at Barclays Capital in New York, said before the report. ``Labor market conditions continue to improve.''

Economists expected the Tempe, Arizona, institute's index to rise to 59, based on the median of 54 forecasts in a Bloomberg News survey. Estimates ranged from 57 to 63.

The industries included in the index account for about 90 percent of the economy. Non-manufacturing businesses have added 1.9 million employees to their payrolls this year, compared with a loss of 64,000 factory jobs.

http://www.bloomberg.com/apps/news?pid=10000087&sid=ab8LAnI3kHgc