Service industries expanded in April at the fastest pace in eight months, a sign the biggest part of the economy will bolster growth this quarter.
The Institute for Supply Management’s nonmanufacturing index rose to 55.2 from the prior month’s 53.1, the Tempe, Arizona-based group’s report showed May 5.
The median forecast of economists surveyed by Bloomberg News called for 54 in the gauge for services, which account for almost 90% of the economy. Readings above 50 indicate expansion.
“Things are getting better,” said Robert Stein, deputy chief economist at First Trust Portfolios LP. “Among the top-line numbers, we’re seeing a re-acceleration of the economy. Consumers are in excellent shape” and “spending is going to continue to grow this quarter.”
The ISM nonmanufacturing survey covers industries including utilities, retailing and health care. It also factors in construction and agriculture.