US services firms likely increased activity in November

Economic IndicatorsAssociated Press

The Institute for Supply Management, a trade group of purchasing managers, issues its index of non-manufacturing activity for September. The report will be released Wednesday at 10 a.m. Eastern.

MODEST GAINS: Economists project that U.S. services grew at a slightly faster rate last month with the institute's index expected to rise to 57.9, according to a survey of economists by data firm FactSet. That would mark a small increase from 57.1 percent in October. Any reading above 50 signals growth.

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The services index reached an eight-year high of 59.6 in August, only to then fall in both September and October.

STRONGER ECONOMY: The index has consistently been pointing to stronger economic growth and hiring this year. Employers have added a solid average of 228,500 jobs a month so far this year, while gross domestic product has increased at an annual rate of more than 3.5 percent in four of the past five quarters.

GDP rose at a 4.6 percent pace in the April-June quarter of this year and a 3.9 percent pace in the July-September quarter, after being mired in recent years at a sluggish 2 percent level.

The November jobs report being released Friday is expected to show gains of 225,000 last month, according to FactSet.

The ISM is a trade group of purchasing managers. Its survey of services firms covers businesses that employ 90 percent of the American workforce, including retail, construction, health care and financial services firms.

The job growth and plunging unemployment rate, currently at 5.8 percent, appear to have bolstered the overall company, as well as services firms. Each additional jobs means there are more Americans with paychecks and incomes to spend at shopping malls, supermarkets, restaurants and online retailers.