|
2012-06-05T21:04:00Z Service industries sustained their pace of growth in May, showingthe biggest part of the U.S. economy is withstanding the impact ofthe European debt crisis. The Institute for Supply Management s index of non- manufacturingbusinesses, which covers about 90 percent of the economy,unexpectedly rose to 53.7 last month from April s 53.5, the Tempe,Arizona-based group said today. The median forecast of 75economists surveyed by Bloomberg News projected 53.4. Readingsabove 50 signal expansion. A pickup in orders, similar to the group s manufacturing data lastweek, and the first decline in prices in almost three years easeconcern services will falter as the debt crisis pushes Europetoward a recession. Today s report also showed employment almoststalled, confirmation of a slump in hiring that signals companiesare hesitant to expand. Caution is going to remain with us, said Michael Carey, chiefeconomist for North America at Credit Agricole CIB in New York, whocorrectly forecast the gain in the services index. There s a bigquestion about Europe, big uncertainty about what will happen onthe fiscal side in the U.S., and the uncertainty is holding backrobust growth. Economists estimates in the Bloomberg survey ranged from 52 to55.1. The ISM services survey covers industries ranging fromutilities and retailing to housing, health care and finance. Stocks rose after the figures and a report that said Europe sbailout fund was preparing a credit line for Spain. The Standard& Poor s 500 Index climbed 0.6 percent to 1,285.5 at the closein New York. Finance ministers and central bank governors from theworld s leading economies also agreed to coordinate their responseto Europe s financial crisis. European Data Elsewhere, euro-area services and manufacturing output contractedin May at the fastest pace in almost three years, adding to signsthe economy is suffering under the worsening sovereign-debt crisis. The Reserve Bank of Australia cut its benchmark interest rate by aquarter percentage point to the lowest since 2009 on concern overEurope and slower Chinese growth. Today s U.S. ISM report followed June 1 data that showed factoriestempered production and pared inventories in May as the globaleconomy weakened. The ISM manufacturing index fell to 53.5 from a10-month high in April. At the same time, the orders gauge climbedto 60.1 last month, the highest since April 2011. The non-manufacturing survey s measure of new orders climbed to55.5 from 53.5 in the prior month, and its business activity gaugerose to 55.6 from 54.6. The index of prices paid decreased to 49.8,the lowest since July 2009, from 53.6. The employment measure dropped to a five-month low of 50.8 from54.2. Uncertain Outlook There s still a little bit of uncertainty, Anthony Nieves,chairman of the ISM s non-manufacturing index, said in aconference call with reporters. Because things are coming in slowand steady, jobs have also been added slow and steady. We continueon a path of growth, he said, though it is slight, incrementalgrowth. A cooling labor market may help explain why demand is yet toaccelerate. Payrolls climbed by 69,000 in May, less than themost-pessimistic forecast in a Bloomberg survey, after a revised77,000 gain in April that was smaller than initially estimated,figures showed June 1. The jobless rate rose to 8.2 percent from8.1 percent. Faster hiring and wage growth is needed to ensure sustained growthin consumer purchases, which increased 0.3 percent in April after a0.2 percent rise the prior month. Jobs Concern The overall economy is still our customers main concern, BillSimon, the U.S. chief executive officer of Wal- Mart Stores Inc.said during a May 17 earnings call. In particular, they remainconcerned about job security or the availability of jobs, followedby gas and energy prices and rising food costs. Car purchases eased in May, company data showed June 1. GeneralMotors Co. (GM) and Toyota Motor Corp. led five of the six largestautomakers in reporting U.S. sales gains in May that trailedestimates as incentive offers failed to draw enough buyers amidslumping employment growth. Falling fuel costs represent a positive influence on consumers. Theaverage cost of a gallon of regular gasoline at the pump dropped to$3.57 on June 4, a three-month low. That is helping shore up purchases in less expensive items.Retailers same-store sales topped analysts estimates in May aswarm weather combined with the lower gasoline prices to drawshoppers. Sales at Minneapolis-based Target Corp., the second-largest U.S. discount retailer, climbed 4.4 percent. Framingham,Massachusetts-based TJX Cos., the owner of T.J. Maxx and Marshalls,posted an 8 percent increase, reports showed last week. I am an expert from wire-cabletray.com, while we provides the quality product, such as China Warehouse Storage Racking , Wire Netting Fence Manufacturer, Basket Cable Tray,and more.
Related Articles -
China Warehouse Storage Racking, Wire Netting Fence Manufacturer,
|
