U.S. Service Firms Grow Faster In January But Scale Back Employment: ISM

Companies in the U.S. service sector such as retail and financial services grew at a slightly faster pace in January but they also scaled back their hiring plans, according to survey of senior executives. The Institute for Supply Management said its nonmanufacturing index edged up to 56.7% from 56.5% in December. Readings over 50% signal that more businesses are expanding instead of contracting. Just three months ago, the index had hit a nine-year high. The new orders index rose 0.3 points to 59.5%, but the employment gauge fell 4.1 points to 51.6%, the lowest level in 11 months. The survey is compiled from a questionnaire of the executives who buy supplies for their companies and it tends to rise in fall in tandem with the broader economy.