Sep 7, 2023 - Economy & Business
U.S. services economy is still in growth mode
- Matt Phillips, author of Axios Markets
The services side of the U.S. economy continues to look solid.
Why it matters: Services account for roughly 75% of the U.S. economy, employing 4 out of every 5 workers.
The latest: A real-time survey on the health of the U.S. services sector for August arrived better than expected on Wednesday.
- The ISM services index registered 54.5 for the month; analysts had expected a slightly softer 52.4.
How it works: ISM index readings above 50 indicate growth or economic expansion. Readings below 50 signal contraction.
Yes, but: A separate reading on the manufacturing sector was below 50 again, marking the 10th straight month of industrial contraction.
- Manufacturers have been whipsawed as the COVID-era boom in demand for manufactured goods from consumers quickly shifted to demand for activities and services — movies, restaurants, vacations, etc. — as the pandemic ebbed.
The bottom line: The engine of the American economy, services, is still purring.