U.S. services firms grew at a slightly stronger pace in November, a sign that the recent stock market sell-offs have yet to dampen enthusiasm among consumers.
The Institute for Supply Management, which is composed of purchasing managers, reported Thursday that its services index rose to 60.7 last month, up from 60.3 in October. Readings above 50 point to further expansion. Services companies have been expanding for 106 months, or almost nine years.
The gain suggests that the U.S. expansion — in the middle of its 10th year — should continue, despite signs of a global slowdown and concerns about a trade war escalating between the United States and China. But the companies surveyed for the index also expressed concern that high tariffs would hinder business, with one retail firm saying that it’s purchasing goods in advance of any potential increases on import taxes in order to minimize any disruptions to business.
“What our respondents are telling us and what our report reflects is that we will have strong growth through the balance of this year,” said Anthony Nieves, chair of ISM’s services survey committee.
The business activity and new orders components of the index improved in November, while employment slowed. Out of 18 industries, 17 reported growth. Real estate and finance were among the sectors showing growth. Only the agricultural sector reported a contraction.
Private services companies account for more than 70 percent of U.S. nonfarm jobs.