Service industries in the U.S. grew in March, capping the strongest quarter in a year and indicating the world’s largest economy will keep generating jobs, Bloomberg Reports.
The Institute for Supply Management’s non-manufacturing index fell to 56 from a one-year high of 57.3 in February, the Tempe, Arizona-based group’s data showed today. Last month’s reading still topped the average for the previous economic expansion. Another report showed companies added an estimated 209,000 workers to payrolls in March.
Sales (RSTAMOM) at businesses like restaurants and retailers are climbing as an improving labor market shores up household incomes and confidence in the face of more expensive gasoline. Since mid-2011, the industries that account for almost 90 percent of the economy have outpaced gains in manufacturing, which had been at the forefront of the two-year expansion.
“No longer can we say that only manufacturing is powering the economy forward,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto, who correctly forecast the level of the index. “The general trend is very encouraging.”