U.S. Services Sector Grew Solidly in November

By Sarah Chaney

WASHINGTON — Service-sector activity across the U.S. expanded in November, a reassuring sign the U.S. economy remained on solid footing as 2019 comes to a close.

The Institute for Supply Management on Wednesday said its nonmanufacturing index — tracking industries including health care, finance, agriculture and construction — grew in November, albeit at a slower pace than in October. The index logged in at 53.9 in November, compared with 54.7 in October.

Separately, data firm IHS Markit said on Wednesday its U.S. services index was 51.6 in November, up from 50.6 in October.

Both indexes are derived from surveys of purchasing and supply executives. Readings above 50 indicate an expansion in activity, while those below 50 indicate contraction.

Demand for goods supplied by service-sector businesses was solid in November, ISM‘s report showed. Companies also ramped up hiring.

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Business activity slowed though from October, however, which could reflect statistical noise.

Anthony Nieves, chairman of the Institute for Supply Management, said growth is solid, but the trade war between the U.S. and China remained a key restraint on both manufacturing and service-sector activity.

“If we have an end or resolution to the trade war, you‘ll see both sectors have a good uptick from that,” Mr. Nieves said.

He added he expects the services sector to remain in growth mode well into 2020. So far, the sector, which accounts for the bulk of U.S. economic activity, has held up well compared with the much-smaller manufacturing sector. A separate ISM gauge that tracks activity in the manufacturing sector contracted in November.

Write to Sarah Chaney at sarah.chaney

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