Solid U.S. jobs and service sector data on Thursday bolstered views the Federal Reserve could start slowing its bond-buying program as soon as this month, but plunging orders for factory goods highlighted uncertainty around the economic outlook.
The pace of growth in the U.S. services sector accelerated in August to its fastest pace in almost eight years, an industry report showed on Thursday.
The Institute for Supply Management (ISM) said its services index rose to 58.6, its highest since December 2005, from 56 in July. The reading handily topped economists’ consensus expectations for 55 and beat the high end of forecasts.
“Services represent approximately 85 percent of the economy, so the continued expansion of the sector is critical for the continuation of the overall economy recovery,” wrote Thomas Simons, a money market economist at Jefferies & Co in New York, in a note to clients.
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