NEW YORK (CNN/Money) - Activity in the U.S. service sector slowed in November, the nation's purchasing managers said Wednesday, missing analysts' expectations.
The Institute for Supply Management's index of non-manufacturing activity came in at 60.1, compared with 64.7 in October. Any reading above 50 indicates growth in the sector. Economists, on average, expected a reading of 64, according to Briefing.com.
U.S. stocks mostly ignored the report and prices continued to rise in early trading. Treasury bond prices were little changed.
The service sector is the economy's biggest employer, and service activity -- including banking, tourism, entertainment and more -- makes up about 80 percent of the total economy.
After a stunning burst of consumer spending in the third quarter, retail and automobile sales have slowed in the fourth quarter, but Wednesday's ISM report, though disappointing to most analysts, was still relatively strong, indicating consumers haven't stopped spending on health care, entertainment, tourism and other services.
The ISM's "new orders" index fell to 60.1 from 64.4 in October, while its "backlog of orders" index slipped to 52.5 from 54. The "prices" index fell to 58 from 58.7.
More encouragingly, however, the employment index rose to 54.9 -- the highest level since 55 in March 2000 -- from 52.9 in October. The ISM said the legal services, entertainment, transportation, finance and banking and health services industries all hired in November. The insurance, business services, real estate, construction, public administration and agriculture industries all cut jobs.
On Friday, the Labor Department is scheduled to release its report on payroll growth and unemployment in November. Economists, on average, expect payrolls to grow by 150,000 jobs and unemployment to remain at 6 percent.
On Monday, the ISM said its manufacturing index, which is more closely watched than the non-manufacturing index, rose to its highest pace in nearly 20 years in November, raising hopes that the broader economy is in the middle of a self-sustaining recovery.
|
