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News > Economy
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U.S. service sector grows
graphic January 4, 2002: 10:53 a.m. ET

ISM's non-manufacturing index shows faster growth in December.
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  • Unemployment rises, job cuts fall - Jan. 4, 2002
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  • Service activity report
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    NEW YORK (CNN/Money) - The pace of business activity in the U.S. service sector quickened in December, the nation's purchasing managers said Friday, as a traditional area of economic strength continued to recover from the Sept. 11 terror attacks.

    The Institute for Supply Management, formerly the National Association of Purchasing Management, said its index of non-manufacturing activity rose to 54.2 percent in December from 51.3 percent in November. Economists surveyed by Briefing.com expected an index reading of 50.0 percent.

    A reading above 50 indicates expansion in the sector, while a reading below 50 indicates contraction.

    Activity in the service sector, usually a reliable source of growth for the U.S. economy, dropped sharply in the wake of last September's terror attacks. It rebounded in November, and December's stronger gain indicates longer-lasting strength, the ISM said.

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    "This second month of non-manufacturing growth, at a higher rate of growth than in November, appears to indicate that November's growth was not entirely due to a rebound from October's low point following the events of Sept. 11," said Ralph Kauffman, chairman of the ISM's non-manufacturing business survey committee.

    December's level of service activity was the highest since December 2000, the ISM said, and was accompanied by strong gains in new orders, which began expanding again, rising to 52.6 percent from 48.3 percent in November.

    The ISM's employment index improved to 45.1 percent from 44.3 percent in November, meaning the sector continued to shed jobs, but at a slower pace.

    The broader U.S. economy has lost about 1.4 million jobs since March, the Labor Department said Friday, and the unemployment rate has risen to 5.8 percent during a prolonged slowdown that some economists think became a recession in March.

    The common definition of a recession, two straight quarters of shrinking gross domestic product (GDP), hasn't yet been met; but GDP shrank in the third quarter and could do so again in the fourth. graphic

      RELATED STORIES

    Unemployment rises, job cuts fall - Jan. 4, 2002

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    Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

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