The U.S. services sector, 70% of the American economy, grew at its best rate in a year according to the Institute for Supply Management today.
The Non-Manufacturing Composite Index rose to 56.0 in February from 55.2 in January. Economists had forecast a reading of 55.0.
A majority of the component indices rose. Business activity climbed to 56.9 from 56.4. The much watched new orders category rose to 58.2 from 54.4; backorders reached 54.5 from 49.0 and export orders jumped to 61.7 from 58.0.
Supplier deliveries and inventory sentiment declined as did employment to 57.2 from 57.5 in January. ISM scores above 50 signal expansion and readings below indicate contraction.
The currency market saw little overt reaction to the stronger numbers, with the dollar slowly rising from a low of 1.3075 against the euro before the New York open to a high of 1.3010 at mid-morning.
The yen also was strongest in Europe, touching 92.92 In Tokyo and then weakening steadily in London and New York to a low of 93.52 by 10:30 am New York time.
Chief Market Strategist