New Numbers Say US Job Market—Especially Service Sector—Back on the Rise Again
It has been a tough few years for the American job market, but things do seem to be improving. As a matter of fact, it seems the US service-sector has grown by leaps and bounds in just the last month.
According to the Institute for Supply Management, the nonmanufacturing purchasing managers index rose 56.5 point in June, which is only slightly higher than the 52.9 point increase in May. These are the highest readings since November. Economists surveyed by the Wall Street Journal had originally expected that the index would rise about 53 points, so things are above par; and any reading above 50 is an indication that activity is expanding. This activity describes industries accounting for roughly 90 percent of the economy. Sure enough, 15 of 18 industries showed this growth in June; this includes entertainment, real estate, retail, and mining.
ISM survey overseer Anthony Nieves comments, “The report looks strong this month. Now we see that after the slowing, the cooling off of last month we have a nice uptick across most of the indexes.”
“Consumers are looking pretty good,” explains FTN Financial economic analyst Sophia Kearney-Lederman, just before the release of the report. “They seem to be carrying the second-quarter rebound.”
ISM non-manufacturing survey chairman Anthony Nieves describes, “We had a couple months in there with some cooling off, but now with this nice pop up here, we’ll see how sustainable it is going forward. When you look at what’s going on domestically, that is predominantly what’s driving this acceleration.”
In addition, Kearney-Lederman goes on to say, “A pickup in manufacturing is a good sign for the service sector as well. Manufacturing has been hit hard by the strong dollar and weak global demand, and it was only so long that services could weather that slowdown as well.”
Finally, Markit responded to the data saying that the data from June “highlighted a sustained rise in business activity across the US service sector, helped by the fastest expansion of new work since the start of 2016.” The firm also notes, though, that “growth momentum remained weak in comparison to its post-crisis trend,” and that this has contributed to an overall slowdown in job creation for the third straight month (culminating in June).