The Services Industry n the U.S. kept growing in October, helped by consumer spending gains that are helping bolster the expansion.
The Institute for Supply Managementâ€™s non-manufacturing index declined to 54.2 last month from 55.1 in September, the Tempe, Arizona-based group said today. Economists projected 54.5, according to the median estimate in a Bloomberg survey. Readings above 50 signal expansion in the gauge of industries that account for almost 90 percent of the economy.
Retailers Macyâ€™s Inc. (M) and Kohlâ€™s Corp. (KSS) may keep benefitting from a pickup in hiring and consumer sentiment heading into the holiday shopping season, while homebuilders enjoy a rebound in demand. Meanwhile, manufacturing is being restrained by a global slowdown and a lack of clarity on U.S. fiscal policy that is preventing the economy from strengthening further.
â€œThings are modestly improving,â€ Michael Feroli, chief economist at JPMorgan Chase & Co. in New York, said before the report. â€œWeâ€™re not growing as fast as weâ€™d like, but weâ€™re still growing. The U.S. economy is expanding and continues to expand.â€
Economistsâ€™ estimates in the Bloomberg survey ranged from 53 to 57. The gauge has averaged 53.4 since the recession ended in June 2009. The Tempe, Arizona-based ISMâ€™s services report is the last piece of economic data before tomorrowâ€™s election, when voters decide between giving President Barack Obama another four years and changing course with Republican challenger Mitt Romney.
The ISMâ€™s manufacturing index on Nov. 1 showed factories expanded in October at a faster pace than projected as orders and production picked up. The gauge rose to a five-month high of 51.7 in from 51.5 the previous month.
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