Indicating a modestly faster rate of growth in U.S. service sector activity in the month of January, the Institute for Supply Management released a report on Wednesday showing an increase by its non-manufacturing index.
The ISM said its non-manufacturing index rose to 55.5 in January from a revised 54.9 in December, with a reading above 50 indicating service sector growth.
Economists had expected the non-manufacturing index to inch up to 55.1 from the 55.0 originally reported for the previous month.
The bigger than expected increase by the headline index came as the business activity index jumped to 60.9 in January from 57.0 in December.
The new orders index also rose to 56.2 in January from 55.3 in December, although the employment index fell to 53.1 from 54.8.
The report also said the prices index slid to 55.5 in January from 59.3 in December, indicating a slowdown in the pace of price growth.
Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee, said respondents “remain mostly positive about business conditions and the overall economy” but noted, “Respondents continue to have difficulty with labor resources.”
On Monday, the ISM released a separate report showing U.S. manufacturing activity unexpectedly expanded for the first time in several months in January.
The ISM said its purchasing managers index surged up to 50.9 in January after slipping to a revised 47.8 in December, with a reading above 50 indicating growth in manufacturing activity.
Economists had expected the index to show a more modest increase to a reading of 48.5, which would have still indicated a contraction.
With the much bigger than expected increase, the index returned to expansion territory for the first time since July 2019.