Service Industries See Mixed Growth
Two reports on the nation’s services economy show mixed signals, though there were signs of expanded activity for real estate during in August.
Data firm S&P Global reported Tuesday that its monthly gauge of the U.S. service sector contracted in August for the second straight month, as inflation and rising interest rates cut into consumer demand. Financial services were the largest contributor, as S&P Global’s overall services index fell to 43.7 in August from 47.3 in July, with anything below 50 indicating a decline in demand for services.
Another prominent monthly gauge, released by the trade research group Institute for Supply Management and using different criteria, showed overall service-related activity rising in August for the 27th month in a row with its index at 56.9. The institute said 14 of 16 tracked service industries reported growth during the month, led by mining, real estate rental and leasing, utilities, construction and educational services.
Anthony Nieves, who chairs the institute’s service business survey committee, cited supply chain, logistics and cost improvements during August, but noted that material shortages remain a challenge for many service-oriented businesses. “Employment improved slightly despite a restricted labor market,” Nieves said.