U.S. Service Sector Barely Growing

ByJohn S. McClenahen Like the manufacturing sector of the U.S. economy, the service sector is growing, but just barely. The Institute for Supply Management's (ISM) non-manufacturing business activity index was 50.9% in August, down 2.2 percentage points from 53.1 in July. However, unlike its counterpart in ISM's PMI manufacturing index last month, the new orders component of the non-manufacturing index shows growth at 51.6% -- albeit a slower rate of growth than July's 52.6%. Nevertheless, August's overall service-sector figure was the index's lowest mark since January's 49.6%. Economists generally had expected the index to rise in August to about 54%. A figure above 50% indicates that the service sector of the economy is growing; a number below 50% suggests contraction.