ISM Services Gauge in U.S. Unexpectedly Climbs to 10-Month High
By Alex Kowalski - Jan 4, 2013
Service industries in the U.S. expanded in December at the fastest pace in 10 months, helping spur the world’s largest economy at the end of 2012.
The Institute for Supply Management’s non-manufacturing index climbed to 56.1 last month from 54.7 in November, the Tempe, Arizona-based group said today. Economists projected the gauge would drop to 54.1, according to the median estimate in a Bloomberg survey. Readings above 50 signal expansion.
A brighter holiday shopping season for retailers and an improvement in the housing market helped propel the industries that make up about 90 percent of the U.S. economy. Further services growth likely depends on how quickly the 12.2 million unemployed Americans can find the jobs needed to boost incomes and spur spending, helping assuage higher taxes in place for this year.
“The recovery we’re seeing in housing construction is likely offering support,” Michelle Meyer, a New York-based senior economist at Bank of America, said before the report. At the same time, “disposable income will be hit in the first quarter because of the increase in income taxes, which will be a drag to the consumer,” she said.