The U.S. service sector recovered in August putting the largest part of the economy firmly back into expansion after a one-month lull, according to the survey from the Institute for Supply Management on Wednesday.
The 'ISM' Index rose to 55.3 from July's 11-month low of 53.9.
While missing the median estimate of 55.8 and slightly below the average for the first seven months of the year, the month was solidly above the 50 dividing line between expansion and contraction. July's unusually steep one month decline of 3.5 points in the index tabulated from the responses of a nationwide survey of purchasing managers, suggested that the last six months of the year might see a slowdown from the second quarter's robust 3 percent expansion.
The estimate for third quarter economic growth from the Atlanta Fed's GDPNow model slipped to 2.9 percent on Wednesday September 6th from 3.2 percent on September 1st,on a projected decline in real consumer spending
Service industries comprise between 85 percent and 90 percent of the U.S. economy, including retail, health care, education, utilities and construction. The balance is composed of manufacturing, farming, mining, resource extraction and sundry endeavors.
The gauge of new orders rose to 57.1 in August from 55.1 in July. Employment climbed to 56.2 from 53.6. The ISM manufacturing index, issued last week, jumped in August to its highest level since 2011.
The measure of business activity rose to 57.5 from 55.9; order backlogs increased to 57.5 from 55.9; the prices paid index advanced to 57.9 from 55.7; export orders increased to 55 from 53.